It has been about a month since the last earnings report for SAIC (SAIC). Shares have lost about 0.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SAIC due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Science Applications Q4 Earnings Beat Estimates, Revenues Miss
Science Applications International reported mixed results for the fourth quarter of fiscal 2026, wherein the bottom line surpassed the Zacks Consensus Estimate, but the top line missed the same. The company’s non-GAAP earnings of $2.62 per share beat the Zacks Consensus Estimate of $2.31 by 13.42%. The bottom line increased 2% from the year-ago quarter’s earnings of $2.57.
Science Applications' fiscal fourth-quarter revenues declined 5% year over year to $1.75 billion and missed the Zacks Consensus Estimate of $1.76 billion.
SAIC’s Q4 in Details
Segment-wise, revenues from Defence and Intelligence, which accounted for 76.3% of revenues, amounted to $1.34 billion and decreased 1.8% year over year. Civilian revenues, which constitute 23.7% of revenues, totaled $415 million and plunged 13.2% year over year.
Net bookings were approximately $0.6 billion in the fourth quarter, which reflected a book-to-bill ratio of 0.3. The company’s trailing 12-month book-to-bill ratio was 1.1 at the end of the fiscal fourth quarter. SAIC’s estimated backlog at the end of the quarter was approximately $22.6 billion. Of the total backlog amount, approximately $3.6 billion was funded.
Selling, general and administrative (SG&A) expenses decreased 9.6% to $85 million. SG&A expenses, as a percentage of revenues, declined to 4.9% from 5.1% in the year-ago quarter.
Non-GAAP operating income increased year over year to $179 million from the year-ago quarter’s operating income of $176 million. The non-GAAP operating margin expanded 60 basis points (bps) year over year to 10.2%.
Adjusted EBITDA rose 2% to $181 million. Adjusted EBITDA margin for the quarter was 10.3% compared with 9.6% in the prior-year quarter.
Balance Sheet & Cash Flow Details of SAIC
Science Applications ended the fiscal fourth quarter with cash and cash equivalents of $182 million, significantly up from the previous quarter’s $45 million.
As of Oct. 31, 2025, Science Applications’ long-term debt (net of the current portion) was $2.47 billion compared with $2.48 billion as of Oct. 31, 2025.
The company generated operating and free cash flows of $258 million and $336 million, respectively, in the fiscal fourth quarter. In fiscal 2026, it generated operating and free cash flows of $609 million and $577 million, respectively..
During the fiscal fourth quarter, Science Applications repurchased shares worth $97 million and paid $17 million in dividends. In fiscal 2026, it bought back shares worth $422 million and paid $70 million in dividends.
SAIC Initiates Fiscal 2027 Guidance
Science Applications expects fiscal 2027 revenues between $7 billion and $7.2 billion. Adjusted EBITDA is anticipated to be in the range of $705-$715 million. Adjusted EBITDA margin expected to be in the 9.9-10.1% band. The company forecasts adjusted EPS in the range of $9.50-$9.70. Science Applications estimates free cash flow for fiscal 2026 to exceed $600 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, SAIC has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock has a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
SAIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Science Applications International Corporation (SAIC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).