CACI Secures $28.7 Million Air Force Modernization Contract

Information technology services provider, CACI International Inc. (NYSE:CACI) recently secured a $28.7 million contract to modernize the information technologies of the U.S. Air Force Civil Engineer Center. The contract expands the scope of work for the company’s Business Systems market area and reinforces its position as one of the leading players in the segment.

The Deal

Per the contract, CACI will provide support services to the U.S. Air Force Civil Engineer Center that offers civil engineering services and enterprise lifecycle leadership to Air Force installations. In particular, the company will offer back-up engineering support to better equip the Air Force to address the evolving requirements for timely and accurate reporting for real property and financial auditing. This will enable the Air Force to fortify itself with enterprise-wide solutions to gain operational advantage against potential enemy threats.

Price Performance

A steady revenue stream, driven by a large pipeline of new projects and multi-million deals at regular intervals has enabled CACI to successfully outperform the industry in the last three months. This Zacks Rank #2 (Buy) stock boasts an average return of 9.4% in the last three months compared with 7.6% gain for the industry.

Growth Drivers

CACI’s system integration skills and intelligence expertise 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. We believe the company is comfortably positioned, given its favored relationship with the Department of Defense.

In addition, having the government as one of the biggest clients lends stability to the business and moderates fluctuations in revenues. Although, the government generally has a lengthy approval process, the project continues earning money years after it has been approved. Moreover, government contracts improve the visibility of future revenue streams. Going forward, CACI intends to assiduously grow in large markets, increase new business initiatives and leverage mergers and acquisitions to further increase its market share and create long-term value for its shareholders.

Key Picks

Other stocks in the industry worth considering include LogMeIn, Inc. (NASDAQ:LOGM) , Perficient, Inc. (NASDAQ:PRFT) and OBIC CO LTD NPV OBIIF, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LogMeIn has a long-term earnings growth expectation of 17.5%. It has beaten estimates in all the trailing four quarters for an average earnings surprise of 8.6%.

Perficient is currently trading at a forward P/E of 19.1x.

OBIC CO is currently trading at a forward P/E of 18.1x.

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