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CACI International Inc.

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CACI International Inc. (CACI - Free Report) recently concluded its acquisition of Delta Solutions and Technologies Inc., commenced its 4 million share buyback program, issued an impressive fiscal 2013 guidance and won important contracts. The Virginia-based company also delivered a 2.1% earnings surprise in the fiscal third quarter 2012. With a price-to-sales (P/S) ratio of just 0.4, this Zacks #1 Rank (Strong Buy) stock presents a true value option for investors.

Driving Catalysts

On May 2, CACI International reported fiscal third quarter 2012 (ended March 31, 2012) earnings per share of $1.45, beating the Zacks Consensus Estimate by 3 cents. This also represents a year-over-year increase of 37%.

Net sales increased 1.6% year over year due to a 23.1% rise in revenue from Federal Civilian Agencies. Operating margin expanded 100 basis points, primarily stemming from the 23.3% annual rise in operating income evolving from a direct labor boost. Total backlog, at the end of fiscal third quarter 2012, rose 10.3% over the year-ago period to $7.65 billion.

New contracts were recently awarded by important customers, including twin task orders worth $72 million by the U.S. Department of Justice and a prime position in a $20 billion contract to augment Government-Wide Transformation.

CACI International is progressing well with its share buybacks, having repurchased roughly 1.3 million shares for an average price of $50.56 per share. Plus, the addition of Delta Solution has enhanced CACI’s position in the business system solutions and government transformation arenas.

Bright Guidance

For fiscal 2012, CACI International anticipates diluted earnings per share between $5.80 and $6.01. The company looks forward to sustaining a healthy performance in fiscal 2013 as well. It expects net revenues of $3.8 billion to $4.0 billion and earnings per share between $6.60 and $6.90, reflecting a 14.3% mid-point growth over fiscal 2012.

Estimates Moving Higher

In the last 60 days, the Zacks Consensus Estimate for fiscal 2012 inched up 1% to $5.88 while the estimate for fiscal 2013 went up by 18% to $6.63. These also reflect year-over-year growth of 32.04% for 2012 and 12.82% for 2013.

A Value Play

The chart below clearly shows how the stock is back on the recovery path after a plunge. Moreover, the Zacks Consensus Estimate remains on a rising scale in the years ahead.

In addition to a low P/S, CACI International is currently trading at a forward P/E multiple of 8.49 and a P/B multiple of 1.20. (A P/S ratio lower than 1.0, a P/E below 15.0 and a P/B ratio under 3.0 generally indicate value.)

Headquartered in Arlington, Virginia, CACI International was incorporated in 1962. The company specializes in providing IT applications and infrastructure to improve communications and secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness.

The company generates revenue, primarily through Department of Defense (DoD), Federal Civilian Agencies, Commercial and Other and State and Local Governments.

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