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Why Should You Retain CACI International in Your Portfolio?

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CACI International, Inc. (CACI - Free Report) is riding on organic revenue growth and expanding margins. Continuous deal wins and rise in contract funding from federal customers are key growth drivers.

Shares of the company have returned an average of 10.6% against the industry’s decline of 11.3%.

 


Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four reported quarters, the average positive surprise being 30.01%.

With expected long-term earnings per share growth rate of 10% and market cap of $3.85 billion, investors need to consider retaining it in their portfolio for long-term gains.

Let’s delve deeper and analyze the stock’s prospects.

Growth Drivers

CACI International is focused on the federal government marketplace and seeks to capture more market share. The company intends to drive operational excellence through its organic and inorganic growth strategy and strengthening existing customer relationships while building newer ones.

The company has been doing well and won a number of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction.

The company has a large pipeline of new projects and continues to win more deals at regular intervals, which is driving its top line. Its strategy of winning high-value contracts, delivering excellence to customers and deploying capital for growth is expected to help it achieve newer heights.

CACI International’s buyout of the Systems Engineering and Acquisition Support Services Business Unit of CSRA LLC in the last reported quarter strengthened its relationship with the U.S. Navy. The acquisition encouraged a raise in fiscal 2019 revenue and earnings guidance.

In addition, the company’s cost-reduction program is helping it boost its operating income. This makes us positive about the company’s near-term prospects.

However, macroeconomic challenges, foreign currency volatility and regulatory pressure remain potential headwinds for the company.

Moreover, CACI International generates revenues from contracts and task orders awarded through a competitive bidding process. These contracts contain provisions permitting a government client to terminate them for convenience. A decision to terminate active contracts is likely to result in significant revenue shortfall for the company.

Zacks Rank & Stocks to Consider

CACI International currently carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader Computer and Technology sector are Synopsys, Inc. (SNPS - Free Report) , Twitter, Inc.(TWTR - Free Report) and Marvell Technology Group Ltd. (MRVL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Synopsys, Twitter and Marvell is projected to be 10%, 22.05% and 9.38%, respectively.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

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