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CACI International Boosts C4I Footing With New Task Order

Zacks Equity Research

CACI International CACI recently secured a five-year task order to provide scientific, systems, and software engineering and technical services to the U.S. Army Reprogramming Analysis Team Program Office. The task was awarded under the SSES NexGen contract vehicle.

The contract value is capped at $88 million, and requires the company to continue providing the U.S. Army Communications-Electronics Command Software Engineering Center with reprogramming infrastructure that develops software for electronic warfare (EW) systems. Moreover, the company will also continue to deliver other electromagnetic spectrum capabilities.

CACI International’s expertise in EW reprogramming capabilities is expected to support Army commanders on various military operations.

CACI International, Inc. Price and Consensus

CACI International, Inc. Price and Consensus

CACI International, Inc. price-consensus-chart | CACI International, Inc. Quote

Relationship With DoD

A leader in IT outsourcing for the U.S. federal government, CACI has ample exposure to the rapidly growing DoD and Department of Homeland Security budgets. A strong defence procurement environment is a tailwind for the company.

In terms of customer mix, during the last reported quarter, the DoD accounted for about 69.1% of total revenues.

Competition Strong

Despite the favorable relationship with the DoD, bright prospects of the C4ISR (Communication, Command & Control, Computers, Intelligence, Surveillance & Reconnaissance) market is keeping competition steady.

CACI’s management noted that the market is becoming more complex and dynamic than before. Per Zion Market Research, the C4ISR market and EW is expected to witness a CAGR of 3.6% between 2018 and 2024 to hit $127.2 billion globally.

Recently, Mercury Systems MRCY won the Best Performance award in Equipment & Systems for delivering solutions for Airbus’ new generation tactical airlifter, improving the company’s visibility as a preferred defense systems and equipment supplier among companies operating in the C4ISR market.

Moreover, last year, Science Applications SAIC signed a potential seven-year, $861.1 million contract with the U.S. Navy, per which, it supports the latter’s C4ISR environment.

Bottom Line

Although competition is a growing concern, we note that CACI has a strong foothold in the C4ISR market. Moreover, it is constantly taking steps to boost its capabilities in this space.

Further, the recent buyouts of LGS and Mastodon, when integrated with CACI’s capabilities, are expected to enable the company to provide products and solutions that address robust requirements in the areas of signals intelligence and spectrum management, EW, communications, C4ISR and cyber defense.

Zacks Rank & A Key Pick

CACI currently carries a Zacks Rank of #3 (Hold).

A top-ranked stock in the broader technology sector is Alteryx, Inc. AYX, flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Alteryx is 17.62%.

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