- The Washington Times - Monday, October 2, 2000

Eliminating paperwork for the government is CACI International's purpose in the technology marketplace. Three quarters of the analysts that follow the Arlington-based information technology provider recommend the stock to Wall Street investors.
"Electronic government, this is a much different business model," said Tom Meagher, analyst with BB&T; Capital Markets. "They've got a nice little platform."
The stock has been trading for the past quarter at a little under its par of nearly $30 per share. But analysts say that performance is not an accurate gauge of the the strength of CACI's management or the quality of its product, but only the amount of money its clients, the federal government, has been willing to shell out for contracts.
After government agencies spent so much trying to protect computer systems in light of the looming year-2000 computer glitch, CACI lost some of its would-be revenue this year. Last year, year-2000-based contracts brought in about $25 million in revenue.
This year, nonetheless, revenue rose to $490.5 million from previous year's $433.5 million. The stock closed Friday on the Nasdaq at $21.43 per share.
Because the government exhausted so much money in the year-2000 effort, it had to cut back on other projects from CACI. So, investors lost interest, and CACI's stock fell, analysts said.
"The government is pretty reluctant after spending a lot on Y2K," said William Loomis, analyst with Legg Mason Wood Walker. "I would say it's undervalued, but not by a wide margin, and I'd say the environment looks better going forward."
Mr. Loomis gives the stock a target price of $33 per share.
The market environment looked favorable for CACI during its first quarter. So, there was talk on Wall Street that the company would be acquired, pulling it into its 52-week high of $30.25 per share on March 28. The company has not, though, advertised itself "for sale."
CACI's major competitors, such as Northrop Grumman and Titan Corp., would be most likely to acquire it, Mr. Loomis said.
They have definitely had an acquisition appetite over the past year, he said. CACI International Inc. plans to stay independent as it has for the past 39 years.
"CACI has been rumored to be one of these ripe for a buy-up," Mr. Meagher said. "That's tended to move the stock up and down."
The company suffered its 52-week low Aug. 1 at $16.75, just months after the stock hit its high. But, the company has been consistent in its earnings this year.
The company reported net income for its fiscal year ended June 30 rose to $17.6 million ($1.52 diluted earnings per share, a measure of the company's profits per share) from $14.5 million ($1.30) from the previous year.
CACI plans to expand its services to allow businesses to make purchases for the company over the Internet. It also plans to grow its network services division, connecting computers together in one company.
It will also incorporate information assurance, software that provides services such as computer security and features to help companies identify if they have been hacked.
CACI also integrates software for services such as digital signatures and policy development.
"It really has kind of exploded out of the gates," Mr. Meagher said.

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