On Jan 15, Zacks Investment Research upgraded technical
) to a Zacks Rank #2 (Buy) largely on the back of strong
CACI's share price has steadily been on an uptrend since Mar
2013. The stock hit a 52-week high of $79.44 on Jan 14, 2014,
before closing the trading session a notch lower at $78.40 for a
healthy year-over-year return of 38.2%. Despite its strong price
appreciation, CACI still has the wherewithal for the stock to
climb up. The stock is currently trading at a forward P/E of
13.4x and has long-term earnings growth expectation of 14.0%.
Why the Upgrade?
Strategic acquisitions, new business initiatives and operational
excellence are the primary driving factors for CACI.
On Nov 15, 2013, CACI closed the $820 million acquisition of Six3
Systems, Inc. in cash, which is in one of the largest
transactions of its kind in history. With approximately 1,600
employees and expected revenues of $470 million in 2013, the
acquisition expands CACI's addressable market by approximately
$15 billion. Furthermore, Six3 Systems adds distinctive
cyberspace, C4ISR (Command, Control, Communications, Computers,
Intelligence, Surveillance and Reconnaissance), and intelligence
capabilities to CACI solutions and services and augments its
customer base. CACI expects the acquisition to be at least 5% and
10% accretive to GAAP and adjusted earnings, respectively, for
calendar year 2014.
The company has a large pipeline of new projects and continues to
win deals at regular intervals. These back-to-back contract wins
are the key catalysts for the company. Furthermore, having the
government as a big client lends stability to the business and
moderates fluctuations in revenues.
In addition, CACI intends to drive operational excellence by
intensively focusing on its organic and inorganic growth strategy
and strengthening its existing customer relationships while
building new ones.
Over the last 7 days, the earnings estimates for CACI did not
show any upward or downward revision for the current quarter and
fiscal year. Despite the lack of estimate revisions, we
anticipate an uptrend for the stock backed by its strong growth
Other Stocks to Consider
Other players in the industry worth reckoning include
Lionbridge Technologies Inc.
Huron Consulting Group Inc.
), each carrying a Zacks Rank #2 (Buy).
CACI INTL A (CACI): Free Stock Analysis
HURON CONSLT GP (HURN): Free Stock Analysis
LIONBRIDGE TECH (LIOX): Free Stock Analysis
VIRTUSA CORP (VRTU): Free Stock Analysis
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