Cautious Outlook on Science Applications: Hold Rating Amid Mixed Signals and Budget Concerns

UBS analyst Gavin Parsons maintained a Hold rating on Science Applications today and set a price target of $111.00.

Gavin Parsons has given his Hold rating due to a combination of factors influencing Science Applications’ current and future performance. While the company has reported strong bookings, achieving over a 1X book-to-bill ratio for the quarter, there are concerns about the sustainability of this momentum. The skepticism among investors regarding SAIC’s ability to meet its 1.2X LTM book-to-bill target and the consensus modeling of FY27 organic growth below the company’s guidance indicates limited potential for positive estimate revisions.
Parsons also notes that while there is an improving funding environment, the risk remains skewed to the downside due to potential delays in the FY26 budget and a possible reduction in guidance. The company’s exposure to government contracts, particularly with the Department of Defense and Intelligence, aligns well with budget growth and reconciliation spend, but the overall sentiment remains cautious. Given these mixed signals and the company’s current trading position near a ten-year low relative to the S&P 500, Parsons concludes that a Hold rating is appropriate.

Based on the recent corporate insider activity of 75 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SAIC in relation to earlier this year.