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CACI International (CACI) Remains Poised for Healthy Growth

Zacks Equity Research

On Sep 6, Zacks Investment Research updated the research report on information technology services provider CACI International Inc. CACI.

CACI International recently ended fiscal 2016 with a bang as it reported strong fourth-quarter results with healthy year-over-year increase in both earnings and revenues. GAAP earnings for the reported quarter were $43.6 million or $1.75 per share compared with $41.4 million or $1.68 per share in the prior-year quarter. The year-over-year increase in earnings was primarily driven by a significant improvement in revenues.

Quarterly revenues were up 28.7% year over year to $1,113.9 million, largely due to the accretive acquisition of National Security Solutions (NSS). The reported revenues exceeded the Zacks Consensus Estimate of $1,099 million. Fiscal 2016 revenues increased to $3.7 billion from $3.3 billion in fiscal 2015 owing to positive contribution from the NSS acquisition.

CACI International has a large pipeline of new projects and continues to win more deals at regular intervals. These back-to-back contract wins are the key catalysts to the company’s success. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenue. Although the government generally has a lengthy approval process, the project continues earning money even years after it has been approved. Moreover, government contracts also improve the visibility of future revenue streams.

The company has been doing very well with a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction. Going forward, the company plans to continue executing its strategy of winning high-value contracts, delivering excellence to its customers and deploying its capital for growth. The company’s robust business model is expected to help it grow and achieve newer heights.

In concurrence with the solid quarterly results, CACI International reiterated its earlier guidance for fiscal 2017. For the year, revenues are expected in the range of $4,050 million–$4,250 million. Net income is anticipated in the range of $150 million–$160 million, resulting in expected earnings per share of $6.02–$6.43.

Moving ahead, CACI International expects to diligently focus on its operating plans to reward shareholders with attractive risk-adjusted returns. The company remains confident about its competitive position and ability to meet customer requirements through the delivery of innovative, affordable solutions and services.

We remain impressed with the solid quarterly results and bullish outlook of this Zacks Rank #2 (Buy) stock. Some other favorably ranked stocks in the industry include CSG Systems International Inc. CSGS, Forrester Research Inc. FORR and Ebix Inc. EBIX, each carrying the same Zacks Rank as CACI International.

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