CACI Offers Bullish FY18 Guidance, Reiterates FY17 View

Technical services provider, CACI International Inc. (NYSE:CACI) recently offered a relatively bullish guidance for fiscal 2018 beginning Jul 1, 2017 by factoring in the solid performance of the ongoing fiscal, healthy growth dynamics and enhanced capabilities to better serve its clients. The company also reiterated its guidance for fiscal 2017.

Outlook for FY18

For fiscal 2018, CACI expects revenues to be in the range of $4,350 million to $4,500 million with earnings of $165–$173 million or $6.52–$6.84 per share. Operating cash flow is expected to be over $280 million with capital expenditures to the tune of approximately $35–$40 million, driven by facility consolidation and information technology improvements.

CACI 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. In addition, the company anticipates benefitting significantly from its cost-reduction program.

FY17 Outlook Reiterated

For fiscal 2017, CACI reiterated its previous guidance and expects net income in the range of $157–$163 million on revenues of $4,275–$4,350 million. Earnings per share are expected to be between $6.25 and $6.49.

With a diligent execution of operational plans, CACI has outperformed the Zacks categorized Computer Services industry in the last one year with an average return of 33.1% compared with 13.0% gain for the latter.

Moving Forward

CACI has a large pipeline of new projects and continues to win more deals at regular intervals. These back-to-back contract wins are the key catalysts driving success perennially for the company. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenues. Moreover, government contracts also improve the visibility of future revenue streams. The company has been doing very well with a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction.

Moving forward, CACI intends to assiduously grow in large markets, increase new business initiatives and leverage mergers and acquisitions to further increase its market share and create long-term value for its shareholders.

CACI currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include ManTech International Corporation (NASDAQ:MANT) , Mattersight Corporation (NASDAQ:MATR) and NCI, Inc. (NASDAQ:NCIT) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ManTech has a long-term earnings growth expectation of 8%. It has beaten earnings estimates thrice in the trailing four quarters with an average positive earnings surprise of 7.9%.

Mattersight has healthy long-term earnings growth expectation of 25%.

NCI has a long-term earnings growth expectation of 5%. It has beaten estimates thrice in the trailing four quarters with an average positive earnings surprise of 9.6%.

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