Shares of CACI International (CACI) hit a 52-week high of $84.08 on Nov 3, 2014. However, the stock closed the session at $83.69, which reflects a solid year-to-date return of 14.6%.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has enough fundamentals that may further drive the stock upward. Investors remain upbeat as the company remains focused on its strategy to grow in large markets and leverage mergers and acquisitions to further increase its market share.
Growth Drivers
On Oct 29, CACI reported recurring earnings (with stock-based compensation adjustments) of $1.74 per share, which comfortably beat the Zacks Consensus Estimate of $1.21. A focused strategy to grow into large markets, new business initiatives and operational excellence are the primary driving factors for CACI.
The company has a large pipeline of new projects and continues to win more and more deals at regular intervals. These back-to-back contract wins are the key catalysts driving success for the company. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenue. CACI recently procured a $212 million Blanket Purchase Agreement from the U.S. Department of Homeland Security (DHS) to provide desktop support services to its Headquarters, the National Protection and Programs Directorate and the Science and Technology Directorate. This contract signifies DHS’ confidence in CACI’s ability to enhance its agency-wide IT services by improving the efficiency of systems and providing faster helpdesk response time.
CACI International expects to diligently focus on its operating plans to reward its shareholders with attractive risk-adjusted returns. The company also remains on track to fully integrate Six3 Systems with its operations to achieve at least 5% accretion to GAAP earnings per share and 10% on an adjusted earnings per share basis. In addition, the company intends to drive operational excellence by intensively focusing on its organic and inorganic growth strategy and strengthening its existing customer relationships while building newer ones.
Other Stocks to Consider
CACI International currently has a Zacks Rank #3 (Hold). Other stocks worth considering in the industry include LogMeIn, Inc (LOGM) and NCI, Inc (NCIT), both holding a Zacks Rank #1 (Strong Buy), and Carbonite, Inc (CARB), carrying a Zacks Rank #2 (Buy).
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