Science Applications International Corporation (SAIC) has clinched a $156 million contract to provide system support to the U.S. Army Reserve Command (“USARC”) under the United States Army Reserve Command Information Technology Support Services (USARC ITSS II) contract. Drawing on its extensive history of collaboration with the U.S. Army Reserve, Science Applications aims to deliver innovative, cost-effective, and mission-oriented managed IT services.
The contract is centered on consolidating global enterprise IT services for USARC, ensuring standardized, responsive, and cost-effective solutions. SAIC’s efforts will improve mission value, user experience, cybersecurity, and network reliability for over 65,000 users across 700 locations worldwide. This initiative reinforces Science Applications’ commitment to supporting program modernization for the U.S. Army Reserve through advanced IT solutions.
Positive Revenue Trend
SAIC is capitalizing on the surge in demand for its technology solutions, propelled by the ongoing digital transformation in defense, space, intelligence, and civilian sectors. The company’s strategic business development, operational excellence, and customer satisfaction have resulted in a robust contract backlog of $23.1 billion as of Nov 3, 2023.
Revenue Composition & Growth
Science Applications’ revenues are primarily derived from the U.S. government, accounting for 98% of its total income. The company’s main clients include various government agencies such as the military branches, the Department of Homeland Security, NASA, and the Department of State. Having the government as a major client provides stability to the business and minimizes revenue fluctuations.
In the third quarter of fiscal 2024, Science Applications reported a 10.6% increase in revenues, demonstrating the positive impact of existing and new contracts. Adjusted earnings per share rose by 19%, reflecting strong operational performance, a lower tax rate, and a reduced outstanding share count.
Stock Performance & Peer Analysis
Currently, Science Applications sports a Zacks Rank #1 (Strong Buy) and has seen its stock rise by 21.4% in the past 12 months. Other top-ranked stocks from the broader technology sector are Zoom Video Communications Inc., NVIDIA Corporation, and Amazon.com. Zoom carries a Zacks Rank #1, while NVIDIA and Amazon each carry a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Zoom’s fiscal 2024 earnings has been revised upwards, suggesting year-over-year growth of 13%. The consensus mark for NVIDIA’s fiscal 2024 earnings indicates a whopping 269% increase from fiscal 2023, while Amazon’s 2023 earnings are expected to see a triple-digit increase on a year-over-year basis.
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