Information technology services provider CACI International Inc. CACI recently secured a $480 million contract to augment the counter-narcoterrorism efforts of the Department of Defense. The contract expands the scope of work for the company’s Intelligence Systems and Support market area and reinforces its position as one of the leading players in the segment.
Per the contract, CACI will provide support services for the Office of the Assistant Secretary of Defense for Special Operations and Low Intensity Conflict that combat threats related to narcotics. In particular, the company will develop communications networks, conduct thorough studies to identify the most effective technical solutions, and support linguistic operations centers across potentially hostile environments. This will enable U.S. forces, related agencies and host nations to effectively counter narcoterrorism.
CACI has a large pipeline of new projects and regularly wins more deals, catalyzing the company’s growth story. CACI intends to drive operational excellence by intensively focusing on its organic and inorganic growth strategy and strengthening its existing customer relationships while building new ones.
A leader in IT outsourcing for the U.S. federal government, CACI earns its revenues through four customer groups – the Department of Defense, Federal Civilian Agencies, Commercial and Other, and State and Local Governments. The Department of Defense’s customers include the U.S. Army (CACI’s largest customer) and the U.S. Navy. Federal civilian agencies provide litigation support services to the Department of Justice.
Having the government as one of the biggest clients lends stability to the business and moderates fluctuations in revenues. Although, the government generally has a lengthy approval process, the project continues earning money years after it has been approved. Moreover, government contracts improve the visibility of future revenue streams.
CACI’s 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 Department of Defense.
Going forward, CACI intends to assiduously grow in large markets, increase new business initiatives and leverage mergers and acquisitions to further increase its market share and create long-term value for its shareholders.
CACI currently has a Zacks Rank #2 (Buy). Some other favorably ranked stocks in the industry include CSG Systems International Inc. CSGS, Ebix Inc. EBIX and Forrester Research Inc. FORR, each carrying the same Zacks Rank as CACI. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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