In reality, SAIC is struggling to shake off the negative image generally associated with public-sector subcontractors. It's true that contracts in the public sector are far less lucrative than in the private sector, and tendering processes are long and arduous.

Paradoxically, this difficulty represents an advantage for players who are well established in the market, familiar with complex procedures, and well connected in the sometimes tortuous administration. It discourages new entrants and strengthens their competitive position, notwithstanding the few margin points lost.

The corollary of this sometimes ungrateful commercial positioning in terms of margins or growth is a very good stability of sales, thanks to the visibility provided by long-term contracts and the sorting that takes place right from the start of the bidding process.

SAIC, which generates the vast majority of its sales with the federal government, particularly in the defense sector, has just completed a quarter that was perfectly similar to the same period last year.

No real growth, but a significantly improved operating margin now that the restructuring program has come to an end, as well as some fine contract wins with, among others, the US Navy and the National Counterintelligence Agency.

Management's forecast for fiscal year 2024 anticipates a drop in sales from $7.7 to $7.2 billion. Cash profit, or free cash flow, is expected to be around $460-$480 million, or $20-$30 million less than in fiscal year 2023.

As usual, two-thirds of this profit will be allocated to share buy-backs, and the remaining third to dividend distribution. With valuation chronically anchored at less than x12-x13 earnings, this management approach makes a lot of sense.