Shares of U.S. defense contractor Science Applications International Corp. (SAIC) are undergoing a significant revaluation following a quarterly report that handily surpassed profit expectations. The stock jumped more than 16 percent in pre-market trading and maintained its positive momentum into Friday’s session. Investors chose to overlook a decline in revenue, focusing instead on robust margin expansion and an upgraded company outlook.
Revised Annual Guidance Fuels Optimism
Management’s decision to raise its full-year forecast for fiscal 2026 has provided further fuel for the stock’s advance.
* Revenue is now projected to be in the range of $7.275 billion to $7.325 billion.
* The forecast for adjusted earnings per share (EPS) was lifted significantly to $9.80–$10.00, up from the prior guidance of $9.40–$9.60.
* Annual free cash flow is expected to exceed $550 million.
This improved guidance underscores a turning point in investor sentiment toward the company.
Quarterly Performance Highlights
After the market closed on Thursday, SAIC disclosed its results for the third quarter of fiscal year 2026, which ended October 31, 2025. The key figures revealed a mixed top-line result but outstanding profitability.
Adjusted earnings per share came in at $2.58, soundly beating the consensus analyst estimate of approximately $2.19 by about 18 percent. Revenue, however, decreased by 6 percent year-over-year to $1.87 billion. Company leadership attributed this dip to completed contracts and timing delays in U.S. government budgets.
Should investors sell immediately? Or is it worth buying Science Applications?
The market’s attention was captured by several other positive metrics:
* The adjusted EBITDA margin remained strong at 9.9 percent.
* Quarterly free cash flow saw a substantial increase to $135 million, a dramatic rise from $9 million in the prior-year period.
* New business awards totaled $2.2 billion, resulting in a book-to-bill ratio of 1.2x. This boosted the company’s backlog to roughly $23.8 billion.
The recent acquisition of SilverEdge was cited as a contributor to the improved margin perspective.
A Shift in Market Perception
The sharp rally in SAIC’s equity marks a notable reversal. Prior to this report, the stock had lost around 20 percent of its value since the start of the calendar year. The powerful market reaction indicates that shareholders are now placing greater emphasis on profitability and future visibility than on a short-term revenue contraction.
Substantial contract wins, including a $1.4 billion award from the U.S. Air Force, demonstrate the resilience of the business model and lay a solid foundation for future revenue generation.
From a technical analysis perspective, the share price breakout above key resistance levels has improved the chart picture. The next test will come with the release of fourth-quarter figures, which must demonstrate whether the high level of new awards can translate into a return to revenue growth.
Ad
Science Applications Stock: Buy or Sell?! New Science Applications Analysis from December 5 delivers the answer:
The latest Science Applications figures speak for themselves: Urgent action needed for Science Applications investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 5.
Science Applications: Buy or sell? Read more here...
