We recently reiterated our Outperform recommendation on CACI International Inc. (CACI).
CACI International targets its services at defense, intelligence, homeland security and IT modernization. Demand for the company’s services is generated by the increasingly complex network, systems and information environments in which governments and businesses operate. These agencies need to update their systems to increase productivity and performance.
Earnings estimates for fiscal 2011 have risen by $ 0.15 in the last ninety days, led by CACI’s strong results for the second quarter of fiscal 2011 and upgraded guidance for fiscal 2011. CACI International estimates revenues between $ 3,500 million and $ 3,630 million in fiscal 2011, up from the previous range of $ 3,450 million -$ 3,600 million.
Net income is now projected between $ 127 million-$ 132 million, up from the previous range of $ 121 million-$ 128 million. Furthermore, EPS is estimated between $ 4.05 and $ 4.20, instead of the earlier $ 3.90 to $ 4.10.
Second quarter results beat the Zacks Consensus Estimate by $ 0.11, driven by revenue growth and a decrease in interest expense. In addition, share repurchase activities also continue to positively impact the earnings.
We currently have an Outperform recommendation on the stock as we expect the company’s growth to be driven organically as well as through acquisitions. The company’s contract wins and recent acquisitions should expand its scale of operations.
Furthermore, CACI’s debt refinancing and share repurchase program will boost the bottom lines. However, in the near-term run margins remain a concern and thus, we have a Zacks #3 Rank, which translates into a short-term Hold rating.
CACI INTL A (CACI): Free Stock Analysis Report
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