Hold Rating for SAIC Amid Sector Challenges and Internal Uncertainties

William Blair analyst Louie DiPalma has reiterated their neutral stance on SAIC stock, giving a Hold rating on May 15.

Louie DiPalma has given his Hold rating due to a combination of factors affecting Science Applications International Corp. (SAIC). Despite a slight revenue increase, the company’s EBITDA has declined, contributing to a decrease in stock value. The broader government tech services sector has also experienced negative momentum, influenced by recent developments such as Booz Allen’s guidance reduction and a Department of Defense memo discouraging consulting.
Additionally, while SAIC reported strong bookings in May, there are concerns about potential delays in reaching their book-to-bill targets due to procurement issues and personnel changes. On a positive note, the company has settled a GSA audit and remains optimistic about future contract opportunities. However, until the company can demonstrate stability in retaining key contracts and the resolution of DOGE-related concerns, the stock is expected to remain within a certain range over the next year.

According to TipRanks, DiPalma is an analyst with an average return of -11.8% and a 59.86% success rate. DiPalma covers the Technology sector, focusing on stocks such as Palantir Technologies, Motorola Solutions, and Science Applications.

In another report released on May 15, Jefferies also maintained a Hold rating on the stock with a $130.00 price target.