Science Applications International SAIC clinched a five-year deal from the U.S. Navy totaling $80.5 million. The contract grants SAIC the responsibility of designing, producing, and deploying the MK 710 Torpedo System Test Sets (TSTS) for the U.S. Navy’s MK 48 heavyweight torpedoes that are integral to the Navy’s submarine force.
SAIC is entrusted with supplying MK 710 TSTS, which will be critical in testing and validating the reliability and functionality of MK 48 heavyweight torpedoes before submitting the solutions to the Navy. The U.S. Navy plans to utilize these tests and validations for training, tactical development, and certifying torpedo upgrades.
This marks the third U.S. Navy contract secured by SAIC in 2024, with the first being a $375 million deal for Modern Vehicle Fielding Integration and Support, and another focusing on the U.S. Navy’s Hypersonics Advanced Concepts and Strategic Missions Programs.
In 2023, SAIC also obtained multiple contracts from the U.S. Navy, covering areas such as Software Development and Engineering support for Naval Air Systems Command, Torpedo Production support, and Naval Air Warfare Center Weapons Division Instrumentation Platform, as well as the Navy’s Tactical Networks.
Renewed Growth Opportunities
Science Applications continues to emphasize its commitment to the federal government market and is keen on enhancing its market penetration. Between 2021 and 2023, 98% of SAIC’s total revenues originated from contracts with the U.S. government. The company’s primary clients encompass various government agencies, including Homeland Security, NASA, the Department of State, and military branches such as the Navy, Airforce, and Army.
The significance of the Navy and other government agencies as major clients stabilizes business operations and reduces revenue fluctuations. Furthermore, government projects, upon approval, yield revenues for multiple years, bolstering the predictability of future revenue streams.
Science Application also stands to benefit from the amplified spending outlined in the latest federal government budget. The augmented budget is expected to expedite the pace of contract awards, which in turn will augur well for SAIC’s top-line growth.
Market Performance and Future Prospects
At present, Science Applications holds a Zacks Rank #2 (Buy). SAIC shares have recorded a 23.7% increase in the past year.
In addition, some other appealing stocks within the broader technology sector include BlackLine BL, Arista Networks ANET, and Dell Technologies DELL. BlackLine boasts a Zacks Rank #1 (Strong Buy), while both ANET and DELL presently carry a Zacks Rank #2. You can explore the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BlackLine’s fourth-quarter 2023 earnings has been revised upward by a penny to 55 cents per share over the last 60 days, while shares of BL have experienced a 15.2% decline in the past year.
For Arista’s fourth-quarter 2023 earnings, the Zacks Consensus Estimate has been adjusted upward by a penny to $1.71 per share in the last seven days, with ANET shares surging 107.7% over the past year.
Furthermore, the Zacks Consensus Estimate for DELL’s fourth-quarter 2024 earnings per share has been raised by a penny to $1.73 over the last 30 days, as DELL shares have escalated by 98.6% in the past year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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