Breaking Down Science Applications International Corporation (SAIC) Financial Health: Key Insights for Investors

Are you keeping a close watch on SAIC's financial performance? As investors, understanding the financial health of companies like SAIC is crucial for making informed decisions. Did you know that SAIC's revenue for the twelve months ending January 31, 2025, reached $7.479B, marking a 0.47% increase year-over-year? But how does this growth tie into the bigger picture, especially with a total debt of $2.41 Billion USD as of January 2025? Let’s delve into the key financial insights that can help you assess SAIC's stability and growth potential.

Science Applications International Corporation (SAIC) Revenue Analysis

Understanding Science Applications International Corporation (SAIC)'s revenue streams is crucial for investors seeking to assess the company's financial health and future prospects. A detailed look into where SAIC generates its income, how quickly these streams are growing, and the relative importance of each segment provides valuable insights.

Breakdown of Primary Revenue Sources:

SAIC primarily generates revenue through providing various services and solutions to U.S. federal, state, and local government agencies, as well as foreign governments and commercial customers. These services encompass:

• Engineering
• IT modernization
• Cloud migration
• AI and machine learning
• Mission support
• Training

These offerings are tailored to meet the evolving needs of its diverse client base, ensuring a steady demand for SAIC's expertise.

Year-over-Year Revenue Growth Rate:

Analyzing SAIC's historical revenue trends reveals its ability to adapt and expand in the competitive technology and government services market. While specific year-over-year growth rates fluctuate based on contract cycles and market conditions, SAIC's strategic focus on high-growth areas like IT modernization and digital transformation has generally supported consistent revenue expansion. For instance, in fiscal year 2024, SAIC reported revenue of $7.4 billion. This reflects a growth rate that aligns with its strategic initiatives and market dynamics.

Contribution of Different Business Segments to Overall Revenue:

SAIC's revenue streams are diversified across several key business segments, each contributing uniquely to the company's overall financial performance. While specific segment breakdowns may vary in public reporting, the main areas include:

• Defense and intelligence
• Civilian agencies
• Commercial markets

The defense and intelligence sectors often represent a significant portion of SAIC's revenue, driven by long-term contracts and the increasing demand for advanced technological solutions in national security. Revenue contribution for the fiscal year 2024 is approximately 45% from defense and intelligence.

Analysis of Any Significant Changes in Revenue Streams:

Investors should pay close attention to any notable shifts in SAIC's revenue streams, as these can signal strategic realignments or emerging market opportunities. Factors that can influence these changes include:

• New contract wins
• Acquisitions or divestitures
• Technological advancements
• Changes in government spending priorities

For example, a significant increase in revenue from civilian agencies could indicate SAIC's success in capturing new business in areas such as infrastructure modernization or healthcare IT. Similarly, a decline in a particular segment may prompt questions about SAIC's competitiveness or strategic focus.

Here’s a table summarizing SAIC's key revenue insights:

In conclusion, a comprehensive understanding of SAIC's revenue streams, growth rates, segment contributions, and any significant changes is essential for investors seeking to make informed decisions. By closely monitoring these factors, investors can gain valuable insights into SAIC's financial health and potential for long-term success.

Read more about Science Applications International Corporation (SAIC) Financial Health: Breaking Down Science Applications International Corporation (SAIC) Financial Health: Key Insights for Investors

Science Applications International Corporation (SAIC) Profitability Metrics

Assessing the financial health of Science Applications International Corporation (SAIC) requires a close examination of its profitability metrics. Profitability, in its essence, reveals how efficiently a company generates profit from its revenue. Key indicators such as gross profit, operating profit, and net profit margins provide insights into SAIC's financial performance and its ability to manage costs effectively.

Understanding these metrics over time and benchmarking them against industry averages offers a comprehensive view of SAIC's financial strengths and weaknesses. Additionally, analyzing operational efficiency, including cost management and gross margin trends, is crucial for investors seeking to make informed decisions.

For the fiscal year 2024, SAIC reported the following profitability metrics:

• Gross Profit: $779 million
• Operating Income: $344 million

These figures provide a snapshot of the company's profitability. Further analysis, including margin calculations and trend assessments, is necessary to derive meaningful insights.

Here's a more detailed breakdown, incorporating data from recent fiscal years:

Examining the trends over time, SAIC has demonstrated consistent performance in both gross profit and operating income. The gross profit margin has remained relatively stable at around 9.6% to 9.7%, indicating consistent cost management. The operating income margin has also been steady at approximately 4.3%. Net profit margin is around 2.8% to 2.9%.

When comparing SAIC's profitability ratios with industry averages, it's essential to consider the specific sector in which it operates—primarily government services and IT solutions. Industry averages can vary widely, but a general benchmark for operating margin in the IT services sector is around 7% to 10%. SAIC's operating margin of 4.3% is lower than this benchmark, suggesting there may be opportunities for improvement in operational efficiency or pricing strategies.

Operational efficiency is critical for maintaining and improving profitability. SAIC's ability to manage costs and maintain a stable gross margin indicates a focus on efficiency. However, further analysis of specific cost components and their impact on profitability would provide a more detailed understanding.

To delve deeper into SAIC's strategic objectives, explore: Mission Statement, Vision, & Core Values of Science Applications International Corporation (SAIC).

Science Applications International Corporation (SAIC) Debt vs. Equity Structure

Understanding how Science Applications International Corporation (SAIC) manages its debt and equity is crucial for investors. This balance sheet analysis provides insights into the company's financial strategy, risk profile, and long-term stability. For the purpose of this blog post, all data and values are based on the 2024 fiscal year.

SAIC's financing strategy involves a mix of debt and equity. Here’s a breakdown:

• Overview of Debt Levels: SAIC utilizes both long-term and short-term debt to fund its operations and growth initiatives.
• Long-Term Debt: As of the end of fiscal year 2024, SAIC's long-term debt stood at $1.49 billion.
• Short-Term Debt: The company also manages short-term debt, which was reported at $14 million.

The debt-to-equity ratio is a key metric to assess SAIC's financial leverage. It indicates the proportion of debt and equity the company uses to finance its assets. Here's how SAIC's ratio compares and what factors influence it:

• Debt-to-Equity Ratio: SAIC's debt-to-equity ratio is approximately 1.42.
• Industry Comparison: This ratio places SAIC in comparison to its peers, where the average debt-to-equity ratio is around 0.70, indicating that SAIC uses more debt relative to equity than some of its competitors.

Recent financial activities, such as debt issuances and credit ratings, offer additional insights into SAIC's financial health:

• Recent Debt Issuances: SAIC has strategically issued debt to fund acquisitions and other growth initiatives.
• Credit Ratings: SAIC's credit ratings remain stable, with ratings from agencies like Moody’s at Baa3, reflecting a moderate credit risk.

Balancing debt and equity is vital for SAIC to maintain financial flexibility and stability. Here's how the company navigates this balance:

• Strategic Financing: SAIC strategically uses debt financing to take advantage of low-interest rates and tax benefits.
• Equity Funding: The company also relies on equity funding through retained earnings and stock issuances to maintain a balanced capital structure.

Here is a summary of SAIC's Debt and Equity Metrics:

For more insights into SAIC's financial health, check out: Breaking Down Science Applications International Corporation (SAIC) Financial Health: Key Insights for Investors

Science Applications International Corporation (SAIC) Liquidity and Solvency

Assessing Science Applications International Corporation (SAIC)'s liquidity involves examining several key financial metrics and trends. These indicators provide insights into the company's ability to meet its short-term obligations and maintain smooth operational flow.

The current and quick ratios are fundamental in evaluating a company's liquidity position. These ratios measure the extent to which a company can cover its current liabilities with its current assets. For the fiscal year 2024, SAIC's financial data offers the basis for calculating these ratios, providing a snapshot of its immediate liquidity. As of January 31, 2024, SAIC's current ratio was approximately 1.2, calculated from current assets of $2.03 billion and current liabilities of $1.69 billion. This indicates that SAIC has $1.20 of current assets for every $1.00 of current liabilities. The quick ratio, which excludes inventories from current assets, was approximately 1.1, suggesting a slightly more conservative but still healthy liquidity position.

Analyzing working capital trends over time provides a deeper understanding of SAIC's operational efficiency and liquidity management. Working capital, calculated as current assets minus current liabilities, reflects the funds available for day-to-day operations. SAIC's working capital as of January 31, 2024, was $340 million. Monitoring changes in working capital helps identify whether the company is effectively managing its short-term assets and liabilities.

Cash flow statements offer critical insights into SAIC's liquidity by tracking the movement of cash both into and out of the company. These statements are divided into three main categories:

• Operating activities
• Investing activities
• Financing activities

Analyzing these cash flow trends helps assess SAIC's ability to generate cash from its core business, manage its investments, and fund its operations. For fiscal year 2024, SAIC reported net cash provided by operating activities of $434 million. Investing activities showed a net cash outflow of $72 million, primarily due to investments in property and equipment. Financing activities resulted in a net cash outflow of $247 million, largely due to share repurchases and dividend payments. These figures indicate that SAIC is generating positive cash flow from its operations, which supports its liquidity.

While SAIC's liquidity position appears stable, potential concerns could arise from significant fluctuations in working capital, negative trends in operating cash flow, or substantial increases in short-term debt. Conversely, strengths include consistent positive operating cash flow, a healthy current ratio, and effective management of working capital.

Here is a summary of SAIC's key liquidity indicators:

For further insights into SAIC's financial health, you can explore: Breaking Down Science Applications International Corporation (SAIC) Financial Health: Key Insights for Investors

Science Applications International Corporation (SAIC) Valuation Analysis

Assessing whether Science Applications International Corporation (SAIC) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment.

To determine the valuation of Science Applications International Corporation (SAIC), several key financial ratios are considered:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of Science Applications International Corporation (SAIC)'s earnings.
• Price-to-Book (P/B) Ratio: It compares Science Applications International Corporation (SAIC)'s market capitalization to its book value of equity.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio assesses Science Applications International Corporation (SAIC)'s total value relative to its earnings before interest, taxes, depreciation, and amortization.

Currently, Science Applications International Corporation (SAIC)'s P/E ratio stands at 21.37, which can be compared against industry peers and historical averages to gauge relative valuation. For instance, compared to the industry average P/E ratio, this could suggest whether the stock is trading at a premium or discount. The P/B ratio is at 2.41, offering insights into how the market values the company's net assets. The EV/EBITDA ratio is 13.98, providing a view of overall valuation relative to operational cash flow.

Analyzing Science Applications International Corporation (SAIC)'s stock price trends over the past year provides context on market sentiment and performance:

As of April 2025, Science Applications International Corporation (SAIC)'s stock has shown moderate volatility. Over the last 12 months, the stock has demonstrated an upward trend, increasing from approximately $115 to $140. This growth reflects increasing investor confidence and positive market reception of Science Applications International Corporation (SAIC)'s strategic initiatives.

Here is a snapshot of Science Applications International Corporation (SAIC)'s stock performance:

Science Applications International Corporation (SAIC) does not currently offer a dividend, so dividend yield and payout ratios are not applicable.

Analyst consensus plays a crucial role in determining market sentiment towards Science Applications International Corporation (SAIC). Based on recent ratings, analysts' recommendations are as follows:

• Buy: Several analysts have issued a 'Buy' rating, indicating confidence in Science Applications International Corporation (SAIC)'s growth potential.
• Hold: A significant number of analysts recommend a 'Hold' rating, suggesting a neutral outlook based on current valuation.
• Sell: Few analysts suggest a 'Sell' rating, implying concerns over Science Applications International Corporation (SAIC)'s future performance.

Overall, the consensus leans towards a 'Hold' to 'Buy' rating, reflecting a cautiously optimistic view of Science Applications International Corporation (SAIC)'s prospects. Price targets from these analysts range from $145 to $160, indicating a potential upside from the current trading price.

To gain further insights into Science Applications International Corporation (SAIC)'s strategic direction, explore Mission Statement, Vision, & Core Values of Science Applications International Corporation (SAIC).

Science Applications International Corporation (SAIC) Risk Factors

Understanding the risks Science Applications International Corporation (SAIC) faces is crucial for investors. These risks can stem from both internal and external factors, influencing the company's financial health and stability. External risks often involve industry competition, regulatory changes, and overall market conditions, while internal risks can relate to operational efficiency, financial management, and strategic execution.

Here's a breakdown of key risk areas:

• Industry Competition: The market for IT and government services is intensely competitive. SAIC competes with numerous large and small companies, both domestically and internationally. Increased competition could lead to pricing pressures, reduced profit margins, and loss of market share.
• Regulatory Changes: Government contracts are subject to strict regulations and oversight. Changes in procurement policies, funding levels, or regulatory requirements can significantly impact SAIC's ability to win and maintain contracts. Compliance costs and potential penalties for non-compliance also pose ongoing risks.
• Market Conditions: Economic downturns, shifts in government spending priorities, and geopolitical instability can all affect the demand for SAIC's services. Uncertainty in these areas can make it difficult to forecast future revenue and profitability.

Operational, financial, and strategic risks are often highlighted in SAIC's earnings reports and filings. These can include:

• Contract Performance: Failure to meet contractual obligations, such as delivering services on time and within budget, can result in financial penalties, damage to reputation, and loss of future business. Effective project management and quality control are essential to mitigate this risk.
• Cybersecurity Threats: As a provider of IT services to government agencies, SAIC is a potential target for cyberattacks. Data breaches, system disruptions, and other security incidents can lead to significant financial losses, legal liabilities, and reputational harm. Investing in robust cybersecurity measures is critical.
• Reliance on Government Contracts: A significant portion of SAIC's revenue comes from contracts with the U.S. government. Any disruption in government funding or changes in spending priorities could have a material adverse effect on the company's financial performance. Diversifying the customer base and pursuing commercial opportunities can help reduce this dependence.

Mitigation strategies and plans are crucial for managing these risks. While specific details may vary, common approaches include:

• Diversification: Expanding into new markets, service offerings, and customer segments can reduce reliance on any single area.
• Operational Efficiency: Streamlining processes, improving project management, and controlling costs can enhance profitability and competitiveness.
• Risk Management: Implementing comprehensive risk management programs, including insurance coverage and contingency plans, can help minimize the impact of adverse events.
• Compliance: Maintaining a strong compliance culture and adhering to all applicable laws and regulations is essential for avoiding penalties and maintaining a positive reputation.

For further insights into SAIC's values, explore: Mission Statement, Vision, & Core Values of Science Applications International Corporation (SAIC).

Science Applications International Corporation (SAIC) Growth Opportunities

Science Applications International Corporation (SAIC) possesses several key growth drivers that underpin its future prospects. These include product innovations, strategic market expansions, and well-executed acquisitions, all of which contribute to the company's anticipated financial performance.

SAIC's revenue growth projections and earnings estimates are based on several factors. According to the Q4 2024 Earning Call Transcript, SAIC anticipates revenue between $7.35 billion and $7.5 billion for fiscal year 2025. Furthermore, SAIC expects adjusted diluted earnings per share to be between $7.50 and $7.75. These projections reflect confidence in SAIC's ability to maintain its growth trajectory through strategic initiatives and operational efficiencies.

Strategic initiatives and partnerships are crucial for SAIC's future growth. SAIC is focusing on key areas such as:

• Digital transformation: Helping clients modernize their IT infrastructure and adopt new technologies.
• Cybersecurity: Providing advanced cybersecurity solutions to protect against evolving threats.
• Space: Expanding its presence in the space sector through innovative solutions and partnerships.
• Data analytics: Leveraging data to provide actionable insights and improve decision-making for clients.

These strategic areas are supported by partnerships and collaborations aimed at enhancing SAIC's service offerings and market reach.

SAIC holds several competitive advantages that position it favorably for sustained growth:

• Strong customer relationships: SAIC maintains long-standing relationships with key government clients, providing a stable revenue base.
• Technical expertise: With a highly skilled workforce, SAIC delivers specialized solutions that meet complex client needs.
• Agile business model: SAIC's ability to adapt to changing market conditions and client requirements enhances its competitiveness.
• Strategic acquisitions: Targeted acquisitions expand SAIC's capabilities and market presence.

These advantages collectively bolster SAIC's capacity to secure and expand its market position.

Here’s a summary of SAIC's financial guidance for fiscal year 2025, reflecting growth expectations:

These projections indicate SAIC's anticipated financial performance, driven by strategic initiatives and market opportunities.

For more detailed insights, check out: Breaking Down Science Applications International Corporation (SAIC) Financial Health: Key Insights for Investors