SAIC Reports Strong Q1 2027 Earnings, Shares Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 01 2026
0mins
Source: Fool
SAIC's stock surged by 17.11% as it crossed above the 5-day SMA, reflecting strong investor confidence following its impressive Q1 2027 earnings report.
The company reported Q1 2027 revenue of $1.9 billion, exceeding analysts' expectations of $1.82 billion, and an adjusted EPS of $3.23, significantly higher than the anticipated $2.28. This performance highlights SAIC's robust position in the digital solutions sector and management's optimistic outlook, raising the adjusted EBITDA forecast for FY 2027 to between $720 million and $730 million. The backlog also increased to $22.9 billion, indicating strong market demand.
This strong earnings report not only boosts investor confidence but also positions SAIC favorably in the market, suggesting potential for continued growth and investment appeal as the stock trades below its five-year average P/E ratio.
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Analyst Views on SAIC
Wall Street analysts forecast SAIC stock price to rise
6 Analyst Rating
2 Buy
4 Hold
0 Sell
Moderate Buy
Current: 114.350
Low
113.00
Averages
122.00
High
128.00
Current: 114.350
Low
113.00
Averages
122.00
High
128.00
About SAIC
Science Applications International Corporation is a technology integrator providing full life cycle services and solutions in the technical, engineering and enterprise information technology (IT) markets. The Company's portfolio of offerings across the defense, space, civilian and intelligence markets include secure solutions in mission IT, enterprise IT, engineering services and professional services. It integrates emerging technology securely into mission critical operations that modernize and enable critical national imperatives, including IT modernization, digital engineering, artificial intelligence and ground vehicle support. Its segments include Defense and Intelligence, and Civilian. Defense and Intelligence segment provides a diverse portfolio of national security solutions to the Department of Defense and Intelligence Community of the United States Government. Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
SAIC Secures $50.6 Million Navy Contract for Torpedo Defense
- Significant Contract Value: SAIC has been awarded a follow-on task order worth $50.6 million from the U.S. Navy to continue providing critical torpedo defense system design, modernization, and sustainment services, further solidifying its long-term partnership with the Navy.
- Driving Technological Innovation: By leveraging advanced digital engineering capabilities, SAIC aims to streamline the design conceptualization, prototyping, and fabrication processes of hardware and software, thereby enhancing the overall effectiveness of the Navy's torpedo defense systems to ensure mission success in evolving maritime threat environments.
- Broad System Support: The contract will support multiple key NUWC torpedo defense systems, including the AN/SLQ-25 Torpedo Countermeasures Transmitting Set and Acoustic Device Countermeasures, ensuring the Navy is equipped with modern defense capabilities to counter emerging threats.
- Strategic Partnership: SAIC's long-standing collaboration with the Navy is built on trust and technical excellence, and this contract reflects the Navy's confidence in SAIC's team's ability to deliver modern torpedo defense systems, further enhancing SAIC's position in the defense market.
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- Sustained Strong Cash Flow: Free cash flow reached $118 million, maintaining industry-best cash conversion rates, which reflects the company's efficiency in capital allocation and provides a solid foundation for future investments and shareholder returns.
- Strong Market Demand: SAIC's net bookings totaled $2.1 billion, resulting in a quarterly book-to-bill ratio of 1.1, indicating excellent performance in contract wins, particularly in Navy and Army businesses, with promising growth potential ahead.
- Strategic Adjustments and Challenges: While the company raised its EBITDA guidance to 10.1%-10.3% for the year, it still faces challenges in achieving sustained organic growth, particularly amid recompete scenarios, necessitating a cautious approach to market volatility and potential uncertainties.
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- Stable Revenue Guidance: While maintaining its revenue guidance for FY 2027 at $7.0 to $7.2 billion, the CFO emphasized a cautious approach in a dynamic environment, reflecting ongoing uncertainty regarding future growth.
- Contract Loss Impact: The unsuccessful renewal of the Ritz contract is expected to create a $200 million headwind in FY 2027, with this loss likely manifesting in Q3 rather than Q2, affecting the company's overall performance.
- Improved Market Sentiment: SAIC's stock has gained over 20% year-to-date, with retail sentiment shifting from 'bullish' to 'extremely bullish', indicating increased investor confidence in the company's future prospects.
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- Profitability Improvement: The reported adjusted EPS of $3.23 significantly exceeded the anticipated $2.28, indicating substantial progress in cost control and operational efficiency within the company.
- Optimistic Outlook: Management raised the adjusted EBITDA forecast for FY 2027 to $720 million to $730 million, reflecting confidence in future performance, while also increasing the adjusted diluted EPS forecast to $9.90 to $10.10, showcasing the company's ongoing growth potential.
- Increased Backlog: As of Q1 2027, SAIC's backlog rose to $22.9 billion from $22.3 billion a year ago, indicating strong market demand, and with the current stock price trading below the five-year average P/E ratio, the investment appeal is highlighted.
See More
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- Improved Profitability: The company reported adjusted earnings per share (EPS) of $3.23, significantly exceeding the anticipated $2.28, reflecting successful strategies in cost control and revenue growth, which enhances investor confidence.
- Optimistic Outlook: SAIC raised its adjusted EBITDA forecast for fiscal 2027 to between $720 million and $730 million from the previous $705 million to $715 million, demonstrating management's confidence in future performance, potentially attracting more investor interest.
- Increased Backlog: As of Q1 2027, SAIC's backlog reached $22.9 billion, up from $22.3 billion a year earlier, indicating strong market demand and contributing to stable revenue growth prospects in the future.
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- Significant Contract Value: SAIC has been awarded a follow-on task order worth $50.6 million from the U.S. Navy to continue providing critical torpedo defense system design, modernization, and sustainment services, further solidifying its long-term partnership with the Navy.
- Driving Technological Innovation: By leveraging advanced digital engineering capabilities, SAIC aims to streamline the design conceptualization, prototyping, and fabrication processes of hardware and software, thereby enhancing the overall effectiveness of the Navy's torpedo defense systems to ensure mission success in evolving maritime threat environments.
- Broad System Support: The contract will support multiple key NUWC torpedo defense systems, including the AN/SLQ-25 Torpedo Countermeasures Transmitting Set and Acoustic Device Countermeasures, ensuring the Navy is equipped with modern defense capabilities to counter emerging threats.
- Strategic Partnership: SAIC's long-standing collaboration with the Navy is built on trust and technical excellence, and this contract reflects the Navy's confidence in SAIC's team's ability to deliver modern torpedo defense systems, further enhancing SAIC's position in the defense market.
See More
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- Strong Financial Performance: SAIC reported first-quarter revenue of $1.9 billion, reflecting organic growth of 0.5%, with adjusted EBITDA of $222 million showcasing robust program execution and cost efficiency, further solidifying the company's market position in defense and intelligence sectors.
- Sustained Strong Cash Flow: Free cash flow reached $118 million, maintaining industry-best cash conversion rates, which reflects the company's efficiency in capital allocation and provides a solid foundation for future investments and shareholder returns.
- Strong Market Demand: SAIC's net bookings totaled $2.1 billion, resulting in a quarterly book-to-bill ratio of 1.1, indicating excellent performance in contract wins, particularly in Navy and Army businesses, with promising growth potential ahead.
- Strategic Adjustments and Challenges: While the company raised its EBITDA guidance to 10.1%-10.3% for the year, it still faces challenges in achieving sustained organic growth, particularly amid recompete scenarios, necessitating a cautious approach to market volatility and potential uncertainties.
See More
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- Profit Outlook Raised: SAIC has increased its adjusted earnings per share forecast for FY 2027 to between $9.90 and $10.10, up from the previous range of $9.50 to $9.70, indicating confidence in future profitability.
- Stable Revenue Guidance: While maintaining its revenue guidance for FY 2027 at $7.0 to $7.2 billion, the CFO emphasized a cautious approach in a dynamic environment, reflecting ongoing uncertainty regarding future growth.
- Contract Loss Impact: The unsuccessful renewal of the Ritz contract is expected to create a $200 million headwind in FY 2027, with this loss likely manifesting in Q3 rather than Q2, affecting the company's overall performance.
- Improved Market Sentiment: SAIC's stock has gained over 20% year-to-date, with retail sentiment shifting from 'bullish' to 'extremely bullish', indicating increased investor confidence in the company's future prospects.
See More
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- Earnings Beat: SAIC's Q1 2027 revenue reached $1.9 billion, surpassing analysts' expectations of $1.82 billion, demonstrating the company's robust performance in the digital solutions sector and solidifying its market position.
- Profitability Improvement: The reported adjusted EPS of $3.23 significantly exceeded the anticipated $2.28, indicating substantial progress in cost control and operational efficiency within the company.
- Optimistic Outlook: Management raised the adjusted EBITDA forecast for FY 2027 to $720 million to $730 million, reflecting confidence in future performance, while also increasing the adjusted diluted EPS forecast to $9.90 to $10.10, showcasing the company's ongoing growth potential.
- Increased Backlog: As of Q1 2027, SAIC's backlog rose to $22.9 billion from $22.3 billion a year ago, indicating strong market demand, and with the current stock price trading below the five-year average P/E ratio, the investment appeal is highlighted.
See More
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- Improved Profitability: The company reported adjusted earnings per share (EPS) of $3.23, significantly exceeding the anticipated $2.28, reflecting successful strategies in cost control and revenue growth, which enhances investor confidence.
- Optimistic Outlook: SAIC raised its adjusted EBITDA forecast for fiscal 2027 to between $720 million and $730 million from the previous $705 million to $715 million, demonstrating management's confidence in future performance, potentially attracting more investor interest.
- Increased Backlog: As of Q1 2027, SAIC's backlog reached $22.9 billion, up from $22.3 billion a year earlier, indicating strong market demand and contributing to stable revenue growth prospects in the future.
See More
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