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Jacobs (J) Wins NASA Contract With $1.8B Potential Base Value

·4 min read

Jacobs Engineering Group Inc. J has secured a contract from the National Aeronautics and Space Administration or NASA to provide engineering and scientific products, technical services and related services to the agency’s Johnson Space Center in Houston and other NASA centers.

NASA has awarded this JSC Engineering, Technology, and Science (“JETS”) II contract to Jacobs, which has a potential base value of $1.8 billion. This is a cost-plus award-fee, indefinite-delivery/indefinite-quantity contract, which has a total potential performance period of 10 years. The work under this contract is slated to begin on Oct 1, with a five-year base period, followed by two two-year option periods and one one-year option period, increasing the potential value to $3.9 billion.

Per the contract, Jacobs will provide engineering design, development, sustaining engineering, analysis, assessment, technology development, test services, and laboratory/facility operation and maintenance for Johnson’s Engineering Directorate.

Jacobs will also provide support in planetary mission and physical science research, astro-material curation, and laboratory/facility operation and maintenance for Johnson’s Exploration Integration and Science Directorate, as well as engineering and related services for other NASA centers and government agencies.

Jacobs’ Critical Mission Solutions (“CMS”) line of business serves global automotive, aerospace, telecommunications, defense, and nuclear clients, as well as the intelligence community of the United States and NASA. In fiscal 2021, approximately 74% of CMS’ revenues were earned from serving the DoD, intelligence community and Federal Civilian governmental entities.

At fiscal second-quarter end, the company reported a total backlog of $27.8 billion, up 8.7% year over year. This reflects persistent solid demand for Jacobs' consulting services. Of this backlog, CMS accounted for $10.5 billion, up from $9.78 billion reported a year ago. The upside provided strong visibility into the base business. P&PS backlog at quarter-end was $16.96 billion, up from $15.5 billion a year ago.

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Jacobs’ shares have lost 4.8% over the past year, almost in line with the Zacks Engineering - R and D Services industry. Impressively, 2022 earnings estimates for J have moved up in the past two months and the estimated figure indicates 13% year-over-year growth. The trend is expected to continue in the near term, courtesy of its solid results for the first half of fiscal 2022.

Zacks Rank & Key Picks

Currently, Jacobs carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KBR, Inc. KBR — currently carrying a Zacks Rank #2 (Buy)— provides professional services and technologies across the asset and program life cycle within government services and hydrocarbons industries worldwide. Its mission-critical government services, high-end and differentiated government business work, strong margin performance, proprietary technology solutions and a significant increase in backlog (particularly in Government Solution) are expected to boost 2022 earnings.

KBR’s 2022 earnings are likely to rise 7.9%. The company has seen a 0.4% upward estimate revision for 2022 earnings in the past 60 days.

AECOM ACM, currently carrying a Zacks Rank #2, is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and those in environmental, energy and water businesses.

AECOM’s expected earnings growth rate for 2022 is 21.6%. The consensus mark for its 2022 earnings has moved up to $3.43 per share from $3.40 in the past 60 days.

Sterling Construction Company, Inc. STRL, a Zacks Rank #2 company, has been benefiting from broad-based growth across the e-infrastructure, building and transportation solutions segments.

The consensus mark for Sterling’s 2022 earnings rose to $2.88 per share from $2.80 in the past 60 days. The estimated figure suggests 34% year-over-year growth.

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