Yahoo Finance Science Applications Secures $60M Contract From U.S. Navy
Science Applications SAIC recently received a single-award, cost-plus-fixed-fee and firm-fixed-price contract worth $60 million to continue supporting the U.S. Navy with its mission engineering capabilities.
Per the contract, the company will test and collect data for MK 48 Heavyweight torpedoes, and MK 54 and MK 46 Lightweight torpedoes to support the Naval Undersea Warfare Center Division Newport.
The contract was given to Science Applications because of its 13-year experience in testing approximately 150 torpedoes.
Science Applications International Corporation Price and Consensus
Science Applications International Corporation price-consensus-chart | Science Applications International Corporation Quote
SAIC Rides on Contract Wins
Science Applications is benefiting from the continuous flow of high-value contracts. A record level of awards reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction. Notably, as of Jan 31, 2020, the company’s total contract backlog was $15.3 billion.
Furthermore, having the government as a big client lends stability to the business and moderates fluctuation in revenues. Although the government generally has a lengthy approval process, the projects earn money for several years after approval.
Notably, Science Applications reportedly was awarded $2.8 billion in national security contract awards for fiscal 2020. Last month, the company received multiple contracts worth $982 million from the U.S. Naval Sea Systems Command to provide its products and services.
Besides, in March, the company received a three-year contract worth $45.2 million to continue providing technical support for tactical warfare training to various Navy and Marine training formations.
Moreover, in January, the company received a $727-million Common Computing Environment (Cloud One) contract from the U.S. Air Force to aid the transformation of about 800 Air Force and U.S. Army mission applications to the cloud.
Back-to-back contract wins are the key catalysts driving the business perennially for Science Applications. Per ResearchAndMarkets, the size of the global Military Simulation and Virtual Training market, which was around $10.25 billion in 2018, is expected to grow to $15.28 billion by 2027, at a CAGR of 4.54%. This forecast bodes well for Science Applications, which is a key supplier in this space.
Zacks Rank & Stocks to Consider
Science Applications currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Rambus, Inc. RMBS, Semtech Corporation SMTC and SYNNEX Corporation SNX, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Rambus, Semtechand SYNNEX is currently pegged at 15%, 12.50% and 9.37%, respectively.
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