CACI International Inc CACI, a defense and intelligence information technology firm, was recently awarded a multiple award contract worth $6 billion by the Department of Defense (DoD). The contract will enable the company to strengthen its foothold in the Business Systems, Enterprise IT, and Cyber Security market.
Per the contract, the company will offer information technology (IT), technical, and management expertise in support of the Defense Logistics Agency’s (DLA) Information Operations Office (J6), program offices, along with other DoD agencies. In addition, the company will also provide its service to J6 Enterprise Technology Services over a span of eight years.
DLA is the largest logistics combat support agency of the DoD, which offers worldwide logistics, acquisition, and technical assistance to the military services, civilian agencies, and foreign countries. CACI will offer its services to various areas which include network and telecommunications, defense business systems support, and information assurance and cyber security.
On the back of continuous contract wins, CACI outperformed the Zacks categorized Computer – Services industry with an average return of 23.6% compared with 8.7% for the latter, over the past 90 days. In addition, over the same time frame, earnings estimates for the current quarter increased 1.4%. This estimate trend was impacted by the company’s organic growth, which looks promising.
A leader in IT outsourcing for the U.S. federal government, CACI earns its revenues through four customer groups: the DoD, Federal Civilian Agencies, Commercial and Other, and State and Local Governments. The company’s DoD customers include the U.S. Army (the largest customer) and the Navy. Meanwhile, 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 mitigates some of the fluctuations in revenue. Although the government generally has a lengthy approval process, the project continues to earn money years after it has been approved. Moreover, government contracts improve the visibility on future revenue streams.
CACI currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include NV5 Global, Inc. NVEE, Gartner, Inc. IT and Verisk Analytics, Inc. VRSK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NV5 Global has a long-term earnings growth expectation of 20%. It has beaten estimates thrice in the trailing four quarters for an average positive earnings surprise of 6.9%.
Gartner has long-term earnings growth expectation of 17.3%. It has beaten estimates in each of the trailing four quarters with an average positive earnings surprise of 14.5%.
Verisk has long-term earnings growth expectation of 11.6% and is currently trading at a forward P/E of 24.9x.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research