Scientific applications (SAIC – Free Report) recently won a $64 million contract from Orange County, California to provide managed information technology (IT) services. Under the extended firm-price contract, SAIC will provide IT solutions to county agencies and departments.
The contract will ensure efficient county operations, including data center, desktops, service center, applications, networks, voice environment and security. Thus, it will optimize the county’s cost structures and better serve its residents.
The last order has a two-year performance period with two one-year options. This decision further strengthens SAIC’s position as a reliable provider of IT solutions.
The company is focusing on the federal government market and capturing a larger market share. It intends to drive operational excellence by focusing intensely on its organic and inorganic growth strategy and by strengthening existing customer relationships while creating new ones. The higher spending proposed in the latest federal government budget is expected to accelerate the pace of contract awards, which will benefit SAIC’s revenue growth.
SAIC won $410 million in contracts with space and intelligence community organizations for the fourth quarter of fiscal year 2022. In December 2021, the company received a $99 million contract from the U.S. Air Force . In the same month, it was awarded a $1.1 billion contract to produce, assemble, test and deliver US Navy (AB/TC) MK 48 MOD 7 torpedo tail cones and MK29 fuel tanks Mod 0 Warshot.
In the fourth quarter of fiscal 2022, SAIC reported revenue of $1.8 billion, an increase of 4% from the prior year quarter. This was primarily driven by contributions from the newly acquired Halfaker business and the ramp-up of new and existing contracts.
The Zacks Consensus estimate for SAIC’s revenue in the first quarter of fiscal 2023 is set at $1.93 billion, suggesting 2.8% year-over-year growth.
Zacks ranking and key picks
SAIC currently carries a Zacks Rank #3 (Hold). SAIC shares are down 1% over the past year.
Some top-ranked stocks overall IT and technology sector are Arista Networks (A NET – free report) and Go Go (GO GO – Free Report), each sporting a Zacks Rank #1 (Strong Buy), and Analog devices (ADI – Free report) carrying a Zacks rank of 2 (buy). You can see the full list of today’s Zacks #1 Rank stocks here.
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