Key Stats for Science Applications International Corporation Stock
- Current Price: ~$115 (June 1, 2026)
- Q1 FY2027 Revenue: $1.91B, +1.6% YoY
- Q1 FY2027 Adjusted EPS: $3.23, +68% YoY
- Q1 FY2027 Adjusted EBITDA: $222M, +41% YoY, 11.65% margin
- Q1 FY2027 Free Cash Flow: $118M
- FY2027 Adjusted EPS Guidance (raised): $9.90–$10.10
- TIKR Model Price Target: $147
- Implied Upside: ~28%
SAIC Stock Surges 10% as Q1 FY2027 Delivers Record Margins and a 42% EPS Beat
Science Applications International Corporation (SAIC) posted a record adjusted EBITDA margin of 11.65% in Q1 FY2027, with SAIC stock jumping 10% on June 1 after the defense IT contractor beat Street EPS estimates by 42%.
Adjusted EPS came in at $3.23 against a consensus estimate of $2.28, representing 68% growth over the prior-year quarter’s $1.92.
Revenue of $1.91B beat Street estimates of $1.82B by nearly 5%, delivering modest 1.6% organic growth in the face of recompete headwinds that management had flagged as the primary drag for the fiscal year.
Prabu Natarajan, Chief Financial Officer and EVP of Enterprise Operations, stated on the Q1 FY2027 earnings call that “fiscal first quarter margin was a company record, driven by strong program execution,” while attributing part of the outperformance to a $12 million gain from the IPO of a venture investment that added 60 basis points to EBITDA margin and approximately $0.20 to EPS.
SAIC stock has been under pressure for the better part of two years as the company absorbed recompete losses in the enterprise IT market, but Q1’s result offered investors a cleaner signal: strip out the one-time venture gain and EBITDA margins still ran “comfortably mid- to upper 10%,” per Natarajan, versus the implied mid- to upper 9% embedded in full-year guidance.
Adjusted EBITDA of $222M was 41% above the prior-year figure of $157M and 27% above the Street estimate of $175M, a magnitude of beat that made even the cautious guidance revision look conservative.
Free cash flow of $118M in the quarter kept SAIC tracking toward its unchanged full-year target of greater than $600M, which management expects to translate to at least $14 of free cash flow per share in FY2027 and at least $13 per share in FY2028 as historical tax assets roll off.
Book-to-bill of 1.1x on net bookings of $2.1B, including a $200M DHS recompete win, keeps SAIC on track for its annual pipeline targets and reinforces the view that recompete win rates are stabilizing toward the 90% range management has targeted.
The company raised full-year adjusted EPS guidance by approximately 4% to $9.90–$10.10, citing Q1’s venture gain and other performance items, while maintaining revenue guidance given the delayed RITS recompete roll-off that now shifts from Q2 to Q3, creating a roughly 3% organic growth headwind in each of the final two quarters.
CEO James Reagan, who accepted the permanent CEO role earlier in the year, disclosed a formal portfolio review aimed at reducing the company’s exposure to commoditized enterprise IT and leaning more heavily into mission-critical engineering and science programs, with a full strategic update planned for the December earnings call.
Project Orbit, SAIC’s enterprise transformation initiative announced in February, has generated more than 3,500 internal ideas and is expected to free up investment capacity to support both margin improvement and targeted growth over time, with a detailed update planned for the September earnings call.
Q1 FY2027 Financials: Revenue Inflects While Margins Break to New Ground
Science Applications International’s revenue of $1.91B in the quarter ended May 1, 2026, marked the first positive YoY comparison after three consecutive quarters of contraction, with the income statement showing revenue declines of 2.7%, 5.6%, and 4.8% in the three preceding quarters before the current 1.5% recovery.
The sequential revenue improvement from $1.75B to $1.91B, a gain of roughly 9%, was driven by stronger on-contract growth and the delayed RITS roll-off, with management noting that on-contract growth ran at 5% in Q1 against the 2% to 3% full-year expectation.
Gross profit rose to $250M in the quarter, up from $210M in the prior-year period, with gross margin expanding to 13.1% from 11.1% a year ago, the widest in the eight-quarter income statement window.
Operating income of $180M was 48% above the prior-year figure of $121M, with the operating margin expanding to 9.4% from 6.4% a year earlier, the strongest reading in the trailing eight-quarter dataset.
The combination of top-line inflection and sustained margin discipline means SAIC stock enters the second half of FY2027 with a higher earnings floor than analysts had modeled, even before accounting for the investment-driven spending that management expects will partially offset this quarter’s outperformance over the remainder of the year.
Is SAIC Stock Undervalued in 2026? What the TIKR Model Implies
TIKR’s base case values Science Applications International stock at approximately $147 by January 2031, implying around 28% total return from the current price of $115, or roughly 5% annualized over approximately 5 years.
If Science Applications International stock sustains its record margin trajectory and the portfolio review accelerates exposure to higher-value mission programs, the high scenario in the TIKR model targets approximately $225, implying around 96% total return or roughly 8% annualized.
If recompete headwinds in the second half of FY2027 prove more persistent than management expects and the Vanguard Evolve transition creates near-term revenue displacement, the low case targets approximately $158, implying around 37% total return or roughly 4% annualized.
The base case, implying roughly 5% annualized from current levels, prices in modest organic growth and only partial realization of the margin and efficiency improvements SAIC is pursuing through Project Orbit.
How did Science Applications International Corporation perform in Q1 FY2027 earnings?
SAIC delivered adjusted EPS of $3.23 in Q1 FY2027, beating the Street estimate of $2.28 by approximately 42%. Revenue reached $1.91B, 1.6% above the prior-year quarter and nearly 5% ahead of the $1.82B consensus estimate, with adjusted EBITDA of $222M coming in 27% above expectations.
Record program execution drove the EBITDA margin to 11.65%, a company record, with a $12M venture investment gain accounting for 60 basis points of that total. Management raised full-year adjusted EPS guidance by roughly 4% to $9.90–$10.10 in response.
Is Science Applications International Corporation stock undervalued?
TIKR’s base case values SAIC stock at approximately $147 by January 2031, implying around 28% total return from the current price of $115, or roughly 5% annualized.
The Q1 earnings result demonstrated that SAIC stock can sustain EBITDA margins above 10% on a normalized basis, with gross margins hitting a multi-year high of 13.1% and operating margins reaching 9.4% in the latest quarter.
The key variable is organic revenue growth: if the company returns to positive organic growth in the second half of FY2027 as recompete headwinds fade, the base case is well supported.
Should You Invest in Science Applications International Corporation?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Science Applications International Corporation stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Science Applications International Corporation alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Access Professional Tools to Analyze SAIC stock on TIKR for Free →
