CACI Gets $497M Contract, Shares Up

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CACI International Inc. (CACI) recently announced its selection as one of the primary contractors for providing communications and network services to the Space and Terrestrial Communications Directorate (S&TCD) division of the U.S. Army’s Communications-Electronics Research, Development and Engineering Center (:CERDEC). The news was greeted with positive response from investors as share prices were up 2.4% to close at $78.16 on Feb 25.

Capped at a value of $497 million, this indefinite delivery/indefinite quantity (:IDIQ) contract has a of 5-year term (three-year base period plus two one-year options). The contract is expected to enhance the company’s presence in the key sector of command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR).

The S&TCD division of CERDEC primarily focuses on providing secure wireless communications and networking technologies over long ranges and dynamic terrains. Leveraging its selection as one of the prime contractors, CACI International will provide technical solutions and program management methodology to the U.S. Army and help in securing wireless military communications and networking technologies.

The contract focuses on five key technology areas of the S&TCD - antennas, system engineering, satellite communication, cybersecurity and communications networks. CACI International will be involved in research, development and evaluation of these systems. Over the years, the company has successfully delivered support services to the U.S. forces and is considered to be an expert in providing mission-critical training solutions. CACI International’s relationship with U.S. Army is also likely to raise the productivity and efficacy of the latter.

Based in Arlington, VA, CACI International delivers IT applications and infrastructure to improve communications and secure the integrity of information systems and networks; enhance data collection and analysis; and increase efficiency and mission effectiveness.

Going forward, CACI International is expected to augment its revenues from the current contract. CACI International has a huge pipeline of projects and continues to win deals at regular intervals. These contract wins are key growth catalysts for the company. In addition, as the U.S. government is one of the company’s biggest clients, it lends stability to the business with a steady revenue stream.

CACI International currently carries a Zacks Rank #3 (Hold). Other stocks  worth considering in the industry include Lionbridge Technologies Inc (LIOX), Syntel, Inc. (SYNT) and Computer Science Corp. (CSC), each holding a Zacks Rank #2 (Buy).

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