SAIC

Rating neutralAI MemoPost-earnings T+1

Science Applications International

As of 2026-09-01/Post-earnings T+1/Confidence medium

Open ticker Back to Memos

Data freshness

AI Memo

As of 2026-09-01 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

neutral

Confidence

medium

Horizon

—

Key catalyst

Bookings and major contract awards must convert into revenue • 2026-11-30

Base target: $126 / p=45% prob

Biggest risk

GAAP EPS declined 12% year over year and adjusted EPS declined 17%; adjusted EBITDA margin fell to 10.3% from 10.5%. Low book-to-bill, only $3.8 billion of funded backlog, and FY27 organic-growth guidance of -2% to 0% constrain forward visibility.

Invalidation

Break below $105 or thesis failure.

What would change my mind?

The earnings print was materially better than consensus, with strong organic Q2 growth, improved contract profitability, raised FY27 profit guidance, and sizeable contract awards. Continued execution could support a modest rerating.

Research note

Recommendation

neutral

Confidence

medium

As of

2026-09-01

Base target

$126

p=45%

Bull target

$145

p=25%

Bear target

$105

p=30%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Q2 beat and raised FY27 guidance support near-term sentiment
Transformation and portfolio execution could support margin expansion
The earnings print was materially better than consensus, with strong organic Q2 growth, improved contract profitability, raised FY27 profit guidance, and sizeable contract awards.

BearKey bullets

Adjusted EBITDA margin declined year over year because of higher selling, general, and administrative expenses [#SEC-8K-2026-08-31].
Adjusted EPS and net income declined year over year despite the consensus beat [#SEC-8K-2026-08-31].
Debt remained approximately $2.5 billion at quarter end, and the MARPA facility limit was increased from $300 million to $400 million [#SEC-8K-2026-08-31].

WatchKey bullets

Bookings and major contract awards must convert into revenue

Summary

High-level snapshot

Recommendation

neutral

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Post-earnings T+1

Base case: $126 (p=45%)

Target spread vs base: +15% / -17%

Scenario probabilities

Bull Target: $145 (p=25%)Base Target: $126 (p=45%)Bear Target: $105 (p=30%)

Commentary

News tone turned positive after the August 31 earnings release. External coverage reported a 6.85% premarket gain, while the stock closed at $128.22, up 1.79%, suggesting partial digestion rather than a full rerating. The earnings beat and guidance raise are constructive, but the muted close, low book-to-bill, negative-to-flat organic-growth outlook, and unavailable post-print analyst revisions support monitoring rather than aggressive positioning.

As of 2026-09-01 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Q2 beat and raised FY27 guidance support near-term sentiment
Transformation and portfolio execution could support margin expansion

Scenarios

Bull Target (Scenario probability)

$145 / p=25% prob

Base Target (Scenario probability)

$126 / p=45% prob

Bear Target (Scenario probability)

$105 / p=30% prob

Analysis 2026-09-01 · RankAlpha Sentiment Codex

Analysis reference price unavailable. Targets are shown without scenario returns.

Sentiment & Exposure

News Sentiment (30d)

68.00

Social Sentiment (7d)

0.00

Events

Other notable items detected

EVENT2026-11-30
Bookings and major contract awards must convert into revenue
Q2 net bookings were approximately $1.2 billion, but quarterly book-to-bill was 0.6 and trailing-twelve-month book-to-bill was 0.8. Backlog was approximately $22.1 billion, including $3.8 billion funded, while the company also disclosed approximately $400 million, $330 million, and $130 million awards plus a subsequent $740 million DHS recompete [#SEC-8K-2026-08-31].
Prob 58.00% • Move 6.00% • Priced-in 42.00%

Short-term Catalysts

Next few weeks

Q2 beat and raised FY27 guidance support near-term sentiment
2026-08-31
SAIC reported Q2 revenue of $1.88 billion, adjusted diluted EPS of $3.01, and 5.3% organic growth; FY27 revenue, adjusted EBITDA, margin, and adjusted EPS guidance were raised [#SEC-8K-2026-08-31]. External coverage reported adjusted EPS of $3.01 versus $2.31 consensus and revenue of $1.88 billion versus $1.76 billion consensus.
Prob 78% • Move 4% • Priced-in 80%

Long-term Catalysts

Months to a year

Transformation and portfolio execution could support margin expansion
2027-09-01
Management cited improved profitability across the contract portfolio and ongoing enterprise transformation aimed at long-term growth and margin expansion, but FY27 organic-growth guidance remains negative to flat at -2% to 0% [#SEC-8K-2026-08-31]. The longer-term thesis therefore requires sustained execution rather than a single-quarter margin benefit.
Prob 45% • Move 10% • Priced-in 35%

Risks

Adjusted EBITDA margin declined year over year because of higher selling, general, and administrative expenses [#SEC-8K-2026-08-31].
Adjusted EPS and net income declined year over year despite the consensus beat [#SEC-8K-2026-08-31].
Debt remained approximately $2.5 billion at quarter end, and the MARPA facility limit was increased from $300 million to $400 million [#SEC-8K-2026-08-31].
FY27 organic-growth guidance remains negative to flat despite the revenue-guidance increase [#SEC-8K-2026-08-31].
Post-print analyst revision breadth, options positioning, short interest, social sentiment, and employee sentiment are unavailable.
Q2 book-to-bill was 0.6 and trailing-twelve-month book-to-bill was 0.8, creating revenue-conversion risk [#SEC-8K-2026-08-31].

Peers

Symbol	Summary
AMTM	Closest packet-supported operating comparator because both rely on government-services demand, contract awards, backlog conversion, and program execution.
PSN	Looser same-sector engineering and infrastructure-services comparator; useful for framing contract execution and public-sector exposure, but operating overlap is limited.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Analysis date: 2026-09-01

Loading AI feed…

Symbol

Summary

AMTM

Closest packet-supported operating comparator because both rely on government-services demand, contract awards, backlog conversion, and program execution.

PSN

Looser same-sector engineering and infrastructure-services comparator; useful for framing contract execution and public-sector exposure, but operating overlap is limited.