CACI Secures U.S. Army Contract - Analyst Blog

By Zacks | October 02, 2012 AAA

Recently, CACI International Inc. (CACI) declared that it has won a $247 million contract from U.S. Army's Communications-Electronics Research, Development and Engineering Center (CERDEC). Per the contract, CERDEC has chosen CACI International as one of two key service providers for controlling its Command, Power, and Integration Directorate's (CP&ID) rapid prototyping and technology insertion programs. The contract pertains to indefinite delivery and indefinite quantity stipulations with one base year followed by four option years. 

With the agreement, the company will be able to strengthen its foothold in the command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) market. Services entailed in the contract include prototyping and integrating C4ISR systems through utilizing U.S. Armed Forces; employing new Army/Joint mission command/command and control models and techniques through extensive research. CACI International shall also be providing its specialized technological services for generating convenient and cost-effective power technologies. The tasks will be executed in the units of CACI and CERDEC at Aberdeen Proving Ground based in Maryland.

This contract will not only proliferate CACI International's expertise in IT enterprise solutions but also ossify its existing association with CERDEC and other Army C4ISR institutions. Management averred that CACI International's state-of-the-art technological support and the urge to continuously re-innovate its field of expertise are attributes that make CACI International the best option for the contract. The contract is also expected to strengthen the company's presence in the C4ISR market.

Contract wins have forever been the key strength for CACI International. The company's contract funding orders surged almost 3.4% annually and 12.6% sequentially to reach $901.1 million for the fourth quarter of fiscal 2012. The flow of contracts helps the company retain its formidable position in the industry.

CACI International competes primarily in the government IT services arena, which, like other government sectors, consists of many competitors of various sizes. Its main competitors include: CGI Group, Inc. (GIB), ManTech International Corporation (MANT) and Sapient Corp. (SAPE), all of whom are strong rivals with their own particular strengths.

The current Zacks Consensus Estimates for CACI International Inc. are $1.50 and $6.63 per share for the first quarter of fiscal 2013 and fiscal 2013 (ending June 30, 2013), respectively. The estimates represent a year-over-year growth of 6.79% for the first quarter and 11.67% for fiscal 2013. At present, we have a 'Neutral' recommendation on CACI International Inc. The stock currently carries a Zacks #3 Rank, which translates into a short-term 'Hold' rating.

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