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Investing.com - Stifel has reduced its price target on Science Applications (NASDAQ:SAIC) to $128.00 from $130.00 while maintaining a Buy rating on the stock. According to InvestingPro analysis, SAIC appears undervalued at current levels, with the stock showing a beta of just 0.49, indicating lower volatility than the broader market.
The price target adjustment follows SAIC’s downgraded revenue outlook, with the company citing market challenges persisting longer than initially anticipated.
Despite the reduced price target, Stifel continues to view SAIC as "an attractive value stock to buy," with its investment thesis centered on low market expectations and strong free cash flow valuation support.
The research firm noted that SAIC’s free cash flow guidance received a mid-single-digit percentage upgrade, which enhances the valuation support for the stock despite lower revenue expectations.
At SAIC’s current stock price of approximately $108, Stifel calculates that the market is valuing the company’s current and next year free cash flow at just 9x and 8x respectively.
In other recent news, Science Applications International Corp (SAIC) announced its Q2 FY2026 earnings, posting a notable earnings per share (EPS) of $3.63, which surpassed analyst expectations of $2.24, representing a 62.05% surprise. However, the company reported revenue of $1.77 billion, which fell short of the anticipated $1.87 billion, marking a 5.35% shortfall. Despite the strong earnings performance, the revenue miss has raised investor concerns about the company’s future guidance. These developments have been a point of focus for investors assessing the company’s financial health. Analyst firms have not yet provided updates on their ratings following these earnings results. The earnings and revenue figures are critical as they reflect the company’s current financial standing and potential future performance. Investors are keenly observing how these recent results might influence SAIC’s strategic decisions moving forward.
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