Why SAIC Stock Plunged Today

Core Viewpoint - SAIC reported disappointing quarterly results due to the government's efficiency drive, leading to a significant drop in share price by 13% [1][3]. Financial Performance - SAIC earned $1.92 per share in fiscal Q1 2026 on revenue of$ 1.88 billion, missing analyst expectations of $2.12 per share and$ 1.87 billion in sales [3]. - Net income decreased by 12% year-over-year to $68 million, and the operating margin fell by 70 basis points to 6.4% [4]. Operational Challenges - The newly formed Department of Government Efficiency (DOGE) is scrutinizing spending, causing procurement delays and extended award timelines [4]. - CEO Toni Townes-Whitley indicated that while the operating environment has stabilized, higher turnover rates among customers are contributing to ongoing challenges [4][6]. Future Outlook - SAIC expects the impact of DOGE on full-year revenue to be less than 1% and booked$ 2.4 billion in future business, indicating potential for recovery [5]. - The company reiterated its full-year guidance, suggesting confidence in regaining profit losses in upcoming quarters [5]. Market Position - Following the recent decline, SAIC is trading at approximately 10 times future earnings, nearing a historical low, which may present a buying opportunity for long-term investors [7].