Defense Contractors Stocks Q4 In Review: CACI (NYSE:CACI) Vs Peers

Wrapping up Q4 earnings, we look at the numbers and key takeaways for the defense contractors stocks, including CACI (NYSE:CACI) and its peers.

Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.

The 13 defense contractors stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 3.4% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 2.6% on average since the latest earnings results.

CACI (NYSE:CACI)

Founded to commercialize SIMSCRIPT, CACI International (NYSE:CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.

CACI reported revenues of $2.22 billion, up 5.7% year on year. This print fell short of analysts’ expectations by 2.4%, but it was still a satisfactory quarter for the company with full-year EPS guidance slightly topping analysts’ expectations but a significant miss of analysts’ revenue estimates.

“Our strong second quarter results demonstrate the continued successful execution of our strategy and the value of our differentiated capabilities. With healthy free cash flow driven by solid revenue growth and strong EBITDA margin, we're delivering on our commitments to shareholders while addressing our customers' most critical mission needs,” said John Mengucci, CACI President and Chief Executive Officer.

Unsurprisingly, the stock is down 2.7% since reporting and currently trades at $615.49.

Is now the time to buy CACI? Access our full analysis of the earnings results here, it’s free.

Best Q4: Leonardo DRS (NASDAQ:DRS)

Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services.

Leonardo DRS reported revenues of $1.06 billion, up 8.1% year on year, outperforming analysts’ expectations by 7%. The business had an exceptional quarter with a solid beat of analysts’ revenue estimates and a solid beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 21.3% since reporting. It currently trades at $46.25.

Is now the time to buy Leonardo DRS? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: Parsons (NYSE:PSN)

Delivering aerospace technology during the Cold War-era, Parsons (NYSE:PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.

Parsons reported revenues of $1.60 billion, down 7.5% year on year, falling short of analysts’ expectations by 4.1%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.

Parsons delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 7.3% since the results and currently trades at $65.11.

Read our full analysis of Parsons’s results here.

Mercury Systems (NASDAQ:MRCY)

Founded in 1981, Mercury Systems (NASDAQ:MRCY) specializes in providing processing subsystems and components for primarily defense applications.

Mercury Systems reported revenues of $232.9 million, up 4.4% year on year. This number topped analysts’ expectations by 10.4%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

The stock is down 10.7% since reporting and currently trades at $88.68.

Read our full, actionable report on Mercury Systems here, it’s free.

Lockheed Martin (NYSE:LMT)

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE:LMT) specializes in defense, space, homeland security, and information technology products.

Lockheed Martin reported revenues of $20.32 billion, up 9.1% year on year. This result surpassed analysts’ expectations by 2.4%. It was a strong quarter as it also logged a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 13.2% since reporting and currently trades at $676.

Read our full, actionable report on Lockheed Martin here, it’s free.

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