CACI International Inc CACI was recently awarded a prime contract for five years, worth $140 by the U.S. Fleet Forces Command (USFFC) Naval Forces Logistics Support/Training Services to provide global logistics support services. The contract will enable the company strengthen its foothold in Logistics and Material Readiness market.
The USFFC supports the U.S Navy to help combat operations. Per the contract, VA-based CACI will continue to offer global logistics support to the Navy. Over the years, CACI has worked closely with the Navy, helping it achieve its missions with its expertise in delivering mission-critical logistics solutions.
On the back of continuous contract wins, CACI outperformed the Zacks categorized Computer - Services industry with an average return of 23.4% compared with 3.9% for the latter, over a period of 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 Department of Defence (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 approval. Moreover, government contracts improve the visibility on future revenue streams.
In addition, CACI has ample exposure to the rapidly growing DoD and Department of Homeland Security budgets. The company’s system integration skills and intelligence expertise allow it to 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. Given all these factors, we believe that CACI is rather comfortably positioned, especially with its favored relationship with the DoD.
CACI currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include CSG Systems CSGS, Ebix Inc. EBIX and WidePoint Corporation WYY. Ebix and CSG Systems both carry a Zacks Rank #2 (Buy), whereas WidePoint sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CSG Systems has beaten estimates in all the trailing four quarters with an average positive surprise of 24.9%.
Ebix has a long-term earnings growth expectation of 10% and has beaten estimates in all the trailing four quarters with an average positive surprise of 15%.
WidePoint has beaten estimates in all the trailing four quarters with an average positive earnings surprise of 37.5%.
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