Science Applications' Winning Streak On, Gets New Contract

Science Applications International Corp. (NYSE:SAIC) has been awarded a $77 million fixed-price contract by County of Orange, CA. The deal requires the company to provide its managed IT services to agencies within the county.

This contract marks the expansion of Science Applications’ business association with the County of Orange. As part of this deal, the company will launch an on-premises voice solution. This apart, a Security Operations Center providing cyber vigilance, vulnerability assessment, threat intelligence, among others, will be established.

Science Applications has been doing very well with a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction.

The company has a large pipeline of new projects and continues to win more deals at regular intervals. Notably, as of Aug 3, 2018, its total backlog was $10.5 billion. These back-to-back contract wins are the key catalysts driving success perennially for the company.

Federal Exposure Drives Growth

The company focuses on strengthening existing customer relationships while building newer ones. Higher spending as proposed in the latest federal government budget is anticipated to accelerate the pace of contract awards, which in turn, will be beneficial for Science Applications’ top-line growth.

Notably, in its last reported quarter, the company won several Expand Awards from the U.S. Space Related Activities and the U.S. Navy. It also secured Protect Awards from the The U.S. Army Aviation and Missile Command, The U.S. Army and the General Services Administration, The U.S. Navy Space and Naval Warfare, the General Services Administration and the U.S. Navy. It also received a notable Grow Award from the Navy.

Further, new contracts involving NASA and other government agencies brought in $24 million in its last reported quarter.

A leader in IT outsourcing for the government agencies, Science Applications has an exposure to the rapidly growing Department of Defense (DoD) and Department of Homeland Security budgets.

Its system-integration skills and intelligence expertise consume a significant portion of the funds earmarked for the Department of Homeland Security while creating systems that foster the sharing of critical information among all intelligence agencies. We believe the company is comfortably positioned, given its favored relationship with the DoD.

Zacks Rank and Stocks to Consider

Science Applications currently carries a Zacks Rank #2 (Buy).

A few other stocks worth considering in the broader Computer and Technology sector are Intel Corp. (NASDAQ:INTC) , Twitter, Inc. (NYSE:TWTR) and Garmin Ltd. (NASDAQ:GRMN) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Intel, Twitter and Garmin is projected to be 8.4%, 22.1% and 7.4%, respectively.

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