Science Applications Intl (SAIC:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Science Applications Intl(SAIC:NYS)

Technology:Information Technology Services

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$76.70 (USD) 09/18/2020

Weighted Valuation
$81.34 (USD)

Overall Rating
Undervalued by 6.0%

Valuation Models Discounted Cash Flow: $91.53 (USD)
Comparables: $66.05 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation
According to Analyst consensus at $105.00 this stock is Undervalued

Company Overview (SAIC:NYS USD)

Price 76.70
Range 75.48 – 78.26
52 week 51.92 – 96.00
Open 78.07
Vol / Avg. 2.23M/689601
Mkt cap 4.46B
P/E 22.30
Div/yield 1.48/0.02
EPS 3.83
Shares 58.16M
Beta 1.01

Company Description

Science Applications International Corp provides technical, engineering and enterprise IT services primarily to the U.S. government. Specifically, the company offers engineering, systems integration and information technology for large government projects and a broad range of services with an emphasis on higher-end technology services. The company’s end-to-end enterprise IT offerings span the entire spectrum of our customers’ IT infrastructure. The company has five operating segments: U.S Army, U.S Navy, Other DoD, Other Federal Government and Other. Approximately all the company’s revenue is earned from contracts within the U.S.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for SAIC:NYS

Using a discounted cash flow model we generated an intrinsic value of $91.53 (USD) for SAIC:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

SAIC:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $91.53 1% 5% 1% 5%
WACC (or Ke) 5.81 $118.22 $73.72
Terminal Growth Rate 0.80 $75.35 $115.79
Tax Rate 0.20 $98.79 $84.28
Cash Flow 439,504,270 $85.51 $97.56
Capital Expenditures -21,200,000 $91.28 $91.79
Long Term Debt 1,045,000,000 $92.43 $90.64

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $66.05 (USD) for SAIC:NYS. We also generated a valuation of $58.27 (USD) using other metrics and comparables.
The comparable companies were CACI International (CACI:NYS), CDW (CDW:NAS), LiveRamp Holdings (RAMP:NYS), Xerox Holdings (XRX:NYS) and DXC Technology (DXC:NYS).

Company SAIC:NYS End Date Value
Earnings/Share $3.44 (USD)
Book Value/Share $24.71 (USD)
Sales/Share $114.47 (USD)
Cash Flow/Share $11.22 (USD)
EBITDA/Share $8.79 (USD)
Price Based on Comps Adjustment Factor (%)
$56.45 (USD) -51.6
$110.02 (USD) 53.4
$76.08 (USD) -66.7
$52.34 (USD) -33.6
$91.60 (USD) -10.1
22.30 PE Ratio 16.41 17.30 22.08 0.00 9.85 0.00
3.10 PB Ratio 4.45 2.06 15.25 3.20 0.74 1.02
0.67 PS Ratio 2.26 0.97 0.90 8.66 0.54 0.25
6.83 PCF Ratio 7.85 10.72 14.57 0.00 4.27 1.86
13.97 EV to EBITDA 10.42 12.58 13.07 0.00 5.60 0.00


Using a multiples approach we generated a valuation of  $120.82 (USD) for SAIC:NYS

Company SAIC:NYS End Date Value
Earnings/Share $3.44 (USD)
Book Value/Share $24.71 (USD)
Sales/Share $114.47 (USD)
Cash Flow/Share $11.22 (USD)
EBITDA/Share $8.79 (USD)
Price Based on Comps Adjustment Factor
$75.11 (USD) 0
$190.09 (USD) 0
$84.75 (USD) 0
$135.12 (USD) 0
$119.02 (USD) 0
Ratios Ratio Average
PE Ratio 21.83
PB Ratio 7.69
PS Ratio 0.74
PCF Ratio 12.04
EV to EBITDA 13.54

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  SAIC:NYS for the last 7 years was  7.24

We ran the Adjusted Book Value for  SAIC:NYS and generated a book value of  $24.78 (USD)
By multiplying these we get an adjusted valuation of  $179.34 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for SAIC:NYS. The 1 analysts have a concensus valuation for SAIC:NYS for 2021 of $105.00 (USD).

SAIC:NYS Science Applications Intl

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 0 0 5.0000 Buy 2020-9-17

Current Price: 76.7 USD

Analyst Consensus
USD Millions 2021
Mean EPS 5.69
# EPS Analysts 1
Mean Revenue 7,161.00
# Revenue Analysts 1
Mean Target Price 105.00
Mean Cash Flow 9.22
Mean Net Income 353.00
Mean Debt Outstanding
Mean Tax Rate 21.40
Mean Growth Rate
Mean Capital Expenditure

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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