Is Science Applications International Corporation (SAIC) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $150.96, Science Applications International Corporation (SAIC) sits below every lens we ran: our valuation lenses put the business somewhere between $157.21 and $254.69 per share. For a cyclical we value through the cycle we publish a range only (peer multiples and our researched mid-cycle DCF): where in the cycle the business sits decides where in that range it lands, and a single figure would claim we know that precisely. This is an educational model, not a price target or a recommendation.
The valuation discounts Science Applications International Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 7.8%, with a long-run terminal growth rate of 2.5%. About 79% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -2.6% annual revenue growth for SAIC. Our base case instead compounds to about 1.4% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, SAIC's modeled DCF value ranges from about $92.02 to $339.13 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Science Applications International Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of SAIC's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind SAIC's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $7,262,000,000 | SAIC FY2026 10-K (accession 0001571123-26-000029, filed 2026-03-16), fiscal year ended 2026-01-30: Revenues $7,262M for the 52 weeks to 2026-01-30 (SAIC's fiscal year ends on the Friday closest to 31 January, so 'FY2026' is mostly calendar 2025). DOWN 2.9% on FY2025's $7,479M; organic -3.3% excluding the SilverEdge acquisition ($27M). Revenue has now gone nowhere for three years: $7,444M (FY2024), $7,479M (FY2025), $7,262M (FY2026). 98% of revenue is U.S. government (52% Department of War, 46% intelligence and other federal agencies); 62% cost-reimbursable, 22% time-and-materials, 16% fixed-price. CROSS-CHECK: H1 FY2027 revenue $3,786M, +3.8% on H1 FY2026 ($3,646M), of which ~1 point is SilverEdge; Q2 organic growth 5.3%. Management guides the second half DOWN because the RITS contract rolls off (see forecast). |
| Base EBIT margin | 7.2% | SAIC FY2026 10-K (accession 0001571123-26-000029): GAAP operating income $521M / revenue $7,262M = 7.17%, as reported. It is AFTER $119M of acquired-intangible amortization, $16M of executive-transition costs (the CEO departed in Q3 FY2026; Jim Reagan, interim, was made permanent in February 2026), $7M of federal tax-audit settlement costs and $10M net of acquisition/restructuring costs — about $33M (0.45 points) of items SAIC calls non-recurring. Its own adjusted operating margin (which also excludes amortization and depreciation) was 9.7%. Earlier years are NOT a cleaner base: FY2024's 10.0% included a $240M gain on divestitures. CROSS-CHECK: H1 FY2027 GAAP operating margin 8.7% ($331M / $3,786M), helped by a $12M gain on the sale of an investment; Q2 alone 8.1%. |
| Forecast revenue growth | -0% → -1% → 2% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; shared by every researched model in this tracker. |
| Beta | 0.72 | Assumption — yfinance published beta (5Y monthly) 0.309; own 10-year monthly regression 0.589, Blume-adjusted: NORMALIZED UP from the published 0.31 to 0.72 — this LOWERS the value. Two steps, one from each peer file. (1) The HII test: at 0.31 SAIC's cost of equity would be 6.8%, BELOW the ~7.0% it would pay on a new unsecured bond — equity cannot be cheaper than the company's own debt — so, as for HII, the anchor is my own 10-year monthly regression against the S&P 500 (yfinance adjusted closes, Nov 2016-Oct 2026): 0.589. The 5-year gives 0.30, the 3-year -0.17 and a 2-year weekly 0.37: budget-driven contractors barely co-move with the market (peers on the same feed: BAH 0.37, KBR 0.47, LDOS 0.59, CACI 0.59, PSN 0.71). (2) The LDOS step: Blume adjustment (0.67 x 0.589 + 0.33 = 0.72), the same final beta as Leidos, because SAIC is MORE levered (net leverage 3.0x per management on the Q2 call; its term loans are secured and its newest notes carry high-yield-style call protection) and has shrunk three years running. Cost of equity 8.84%, ~180bp above the new-debt rate — the gap the HII/KO/PEP/PG files carry. Sensitivity: the unadjusted 0.589 gives $176.83; the Blume-adjusted published beta (0.54) $185.89; the published 0.31 $234.27. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability and the same as the LDOS file. It is NOT conservative for this company: SAIC's revenue was $7.4B in FY2024 and is guided to $7.25B in FY2027, so 2.5% forever assumes it eventually grows with federal technology spending rather than continuing to lose share. 2.0% gives $141.74; the market price implies ~1.4% (holding everything else). Must remain < WACC of ~7.77%. |
| Diluted shares | 43M | SAIC Q2 FY2027 10-Q (accession 0001571123-26-000133, filed 2026-08-31): Q2 FY2027 weighted-average diluted shares 42.8M (H1 43.4M; FY2026 46.5M; FY2025 50.5M). The count is falling FAST: $286M of stock bought back or withheld in H1 FY2027 after $445M in FY2026, under a $1.2B authorization from December 2024. 41,897,635 shares were outstanding at the 10-Q cover date, so the 42.8M used is a little conservative. No credit is given for future buybacks. |
| Market price | $150.96 | Delayed quote · as of 2026-11-10 05:04 UTC |
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