What Happened?

Shares of government IT services provider Science Applications International Corporation (NASDAQ:SAIC) jumped 11.7% in the morning session after the company reported impressive fourth quarter 2024 (fiscal 2025) results, which blew past analysts' sales and earnings estimates.

Organic sales grew 5.8% compared to the previous year by increased contract volume, which helped push adjusted EBITDA up 39% compared to the prior year. Margins expanded significantly, with operating income as a percentage of revenue rising to 7.5% from 4.5% in the prior year, thanks to improved contract profitability and lower expenses. This was a key driver behind the earnings beat.

Looking ahead, full-year guidance for EBITDA and EPS were both ahead, suggesting the improved growth momentum is expected to continue. Overall, we think this was a strong quarter with top and bottom-line improvements.

The shares closed the day at $111.71, up 6.9% from previous close.

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What The Market Is Telling Us

SAIC’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for SAIC and indicate this news significantly impacted the market’s perception of the business.

SAIC is down 0.2% since the beginning of the year, and at $111.90 per share, it is trading 27.4% below its 52-week high of $154.10 from November 2024. Investors who bought $1,000 worth of SAIC’s shares 5 years ago would now be looking at an investment worth $1,794.

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