William Blair analyst Louie DiPalma has reiterated their neutral stance on SAIC stock, giving a Hold rating today.
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Louie DiPalma’s rating is based on a combination of factors affecting Science Applications International Corp. (SAIC). The company reported mixed results for the second quarter, with revenue falling short of expectations and a significant reduction in guidance for fiscal years 2026 and 2027. The guidance cut was primarily due to slower growth in existing contracts, delays in securing new business, and postponements in the initiation of new programs. Despite these challenges, the management anticipates maintaining stable EBITDA margins due to a flexible cost structure.
On the positive side, SAIC’s free cash flow outlook has improved, with projections for fiscal 2027 increasing from $12 to $13.50 per share. Additionally, adjusted EBITDA and EPS exceeded consensus estimates, indicating some operational strengths. However, the overall outlook remains cautious, with revenue and EBITDA guidance for 2026 being lowered amidst a challenging business environment. Consequently, DiPalma maintains a Hold rating, expecting the stock to remain range-bound over the next year until the company can address these headwinds and demonstrate its ability to secure and retain key contracts.
DiPalma covers the Technology sector, focusing on stocks such as Caci International, Palantir Technologies, and ViaSat. According to TipRanks, DiPalma has an average return of -2.7% and a 63.79% success rate on recommended stocks.
In another report released today, Truist Financial also reiterated a Hold rating on the stock with a $110.00 price target.