CACI International IncCACI recently announced that it was awarded a $21 million task order by the Space and Naval Warfare Systems Center (SSC) Atlantic. The contract spans over a period of two years.
Per the deal, the company will offer cyber security systems support to the Naval Facilities Engineering Command (NAVFAC) to augment security of industrial control systems, important to the country's critical infrastructure.
SSC Atlantic offers a wide range of information warfare services to the Navy, which includes communication and networking systems; intelligence, surveillance, and reconnaissance support; business systems; and information security. Per the contract, CACI will continue to offer personnel and expertise to support NAVFAC's capability to meet Department of Defense's (DoD) information assurance standards for providing cyber security 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 has outperformed the Zacks categorized Computer - Services industry with an average return of 6.03% compared with 5.30% gain for the latter, over a period of 30 days. This deal marks the company's commitment to offering its expert services to the Navy.
A leader in IT outsourcing for the U.S. federal government, CACI earns its revenues through four customer groups: the 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 revenues. 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 comfortably positioned, especially with its favored relationship with the DoD.
CACI currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Hitachi, Ltd. HTHIY , Publicis Groupe S.A. PUBGY and InnerWorkings, Inc. INWK . Publicis Groupe and InnerWorkings both carry a Zacks Rank #2 (Buy), while Hitachi sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Hitachi is currently trading at a forward P/E of 10.9x. It has a long-term earnings growth expectation of 13%.
Publicis Groupe has a long-term earnings growth expectation of 9.51%. It is currently trading at a forward P/E of 14.6x.
InnerWorkings has a long-term earnings growth expectation of 21.7%. It is currently trading at a forward P/E of 23.6x.
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