Science Applications International Corporation (NYSE:SAIC), is not the biggest company in the market, but it has received a lot of attention due to a substantial price movement on the NYSE over the past few months, rising to 91 $.51 at one point, and falling to lows of $81.32. Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to answer is does the current Science Applications International price of $82.98 reflect the true value of the mid cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at Science Applications International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Science Applications International
What is Science Applications International worth?
Good news, investors! Science Applications International is still a good deal right now according to my multiple price model, which compares the company’s price-to-earnings ratio to the industry average. I used the price/earnings ratio in this case because there is not enough visibility to predict its cash flow. The stock’s ratio of 15.96x is currently well below the industry average of 23.65x, meaning it is trading at a lower price than its peers. Science Applications International’s stock price also seems relatively stable compared to the rest of the market, as evidenced by its low beta. If you think the stock price should eventually reach its industry peers, a low beta might suggest it’s unlikely to do so anytime soon, and once it does, it may be difficult to fall back into an attractive buy range.
Can we expect growth from Science Applications International?
Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With double-digit earnings growth of 11% over the next two years, the outlook is positive for Science Applications International. It seems that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What does this mean to you :
Are you a shareholder? Given that SAIC is currently trading below the industry PE ratio, now may be the perfect time to increase your stock holdings. With a positive earnings outlook on the horizon, it appears that this growth has yet to be fully priced into the stock price. However, there are also other factors such as the capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on SAIC for a while, it might be time to get into the stock. Its prosperous future earnings outlook is not yet fully reflected in the current share price, which means it is not too late to buy SAIC. But before making investment decisions, consider other factors such as the strength of its balance sheet, in order to make an informed investment decision.
If you want to learn more about Science Applications International, you should also consider the risks it currently faces. Our analysis shows 2 warning signs for Science Applications International (1 cannot be ignored!) and we strongly recommend that you consult them before investing.
If you are no longer interested in Science Applications International, you can use our free platform to view our list of over 50 other stocks with high growth potential.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.