SAIC Stock Rockets After Upbeat Q1 – CFO Flags Caution On ‘Uncertainties In A Dynamic Environment’

• The company raised its fiscal year 2027 profit outlook while holding revenue guidance steady at $7.0 billion to $7.2 billion.
• The company’s CFO stated that the firm is taking a measured approach to the year and that uncertainty still lingers in a dynamic environment.
• The CFO added that the unsuccessful Ritz recompete, a lost contract renewal bid, is expected to be a $200 million headwind in fiscal year 2027.
  
   

Shares of Science Applications International Corp (SAIC) climbed over 17% on Monday after the defense and government IT contractor reported first-quarter results that beat revenue and earnings expectations. 

However, the firm’s management has come out with a conservative tone on revenue guidance. SAIC reported first-quarter revenue of $1.9 billion, beating Wall Street expectations of $1.8 billion, while adjusted earnings of $3.23 per share surpassed analysts’ estimate of $2.28 for the same period.

Net bookings at the first-quarter end were at $2.1 billion, while free cash flow came in at $118 million.

SAIC Keeps The Conservative Hat On

The company raised its fiscal year 2027 profit outlook while holding revenue guidance steady at $7.0 billion to $7.2 billion.

In an earnings call, Prabu Natarajan, Chief Financial Officer at SAIC, said, "I would not probably quarrel with the math that a minus 2% to minus 4% [organic growth] becomes harder to comprehend given the solid start we had to the year. I think we're just firmly got our conservative hat on right now on the revenue guide."

He further added that the unsuccessful Ritz recompete, a lost contract renewal bid, is expected to be a $200 million headwind, which will now likely roll off in the third quarter rather than the second quarter, due to a recent protest adjudication. 

On-contract growth, partially offsetting the Ritz recompete, is expected to remain at 2% to 3%, below the 6% to 8% seen in fiscal years 2024 and 2025, Natarajan noted.

The company expects adjusted earnings of $9.90 to $10.10 per share in fiscal year 2027, up from a prior range of $9.50 to $9.70 per share.

He also stated that the company is taking a measured approach to the year and that uncertainty still lingers in a dynamic environment.

What Retail Thinks Of SAIC

Retail sentiment surrounding the stock has improved to ‘extremely bullish’ from ‘bullish’ while message volume increased to ‘extremely high’ from ‘high’ in the past 24 hours.

SAIC stock has gained over 20% so far this year.

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