Zacks Industry Outlook CACI International, CSG Systems International and Innodata

For Immediate ReleaseChicago, IL – November 13, 2024 – Today, Zacks Equity Research like CACI International CACI, CSG Systems International CSGS and Innodata INOD.Industry: Computer ServicesLink: https://www.zacks.com/commentary/2368950/3-stocks-to-buy-from-the-prospering-computer-services-industryThe Zacks Computer - Services industry is suffering from broader macroeconomic challenges that have resulted in an elongated sales cycle, lower conversion rates and customer delays in making purchase decisions. However, industry participants like CACI International, CSG Systems International  and Innodata  are riding on the ongoing digital transformation, which is increasing the demand for cloud-enabled software solutions.The rising adoption of digital transformative techniques in healthcare and financial services has been a silver lining for industry participants. The growing need for consulting, research and cyber-security solutions, stringent regulations, digital healthcare and the growing adoption of business automation solutions is likely to continue driving the industry’s prospects.Industry DescriptionThe Zacks Computer - Services industry primarily comprises companies that offer cloud and software-based solutions. Their offerings include consulting and research solutions, security solutions, business support solutions, systems engineering, and software application development solutions. The industry participants cater to varied end markets and customers, including intelligence, defense, U.S. government agencies, communications, banking, financial services, insurance, healthcare, and media and entertainment.Consultancy companies in the industry are helping clients in their ongoing digital transformation. They provide end-to-end services, including application development, integration and maintenance, technology infrastructure management and business process services.3 Computer-Services Industry Trends to WatchRemote & Hybrid Work Trends Boost Prospects: The industry’s growth is expected to accelerate in the days ahead based on an increasing number of remote and hybrid workers. In this era of digital transformation, enterprises are actively seeking a common ground between on-premise and cloud infrastructures, enabling them to provide flexible and easily adaptable hybrid solutions. The growing remote-working trend has led to increased demand for cloud and cost-efficient business support solutions, as well as other digital monetization solutions, which bode well for the industry.Growing Cyber Attacks are Creating a Tailwind: The increasing number of cyber-attacks and related security risks are expected to keep the industry’s momentum alive. Government agencies are ideal targets for cyber-attacks, as they are entrusted with sensitive information. Therefore, the growing need for cyber security solutions and services in critical areas like defense, intelligence and civilian agencies of the U.S. government bodes well for industry players.Regulatory Compliance Drives Demand: The companies in this industry are likely to benefit from increasingly complex network systems and sensitive information environments in which governments and businesses operate. The industry participants are keeping pace with the global regulatory and business practice requirements, thereby helping customers incorporate the best practices while complying with governmental and industry norms.Zacks Industry Rank Indicates Bullish ProspectsThe Zacks Computer – Services industry is housed within the broader Zacks Computer and Technology sector. It currently carries a Zacks Industry Rank #73, which places it in the top 29% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.Given the bullish industry outlook, there are a number of stocks worth buying currently. But before we present those stocks, let’s take a look at the industry’s recent stock market performance and valuation.Industry Lags Sector and S&P 500The Zacks Computer – Services industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 Index over the past year.The industry has risen 27.4% over this period compared with the S&P 500’s appreciation of 36% and the broader sector’s return of 40.3%.Industry's Current ValuationOn the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 20.29X compared with the S&P 500’s 22.66X and the sector’s forward-12-month P/E of 27.35X.Over the last five years, the industry has traded as high as 20.29X and as low as 13.14X, with a median of 16.21X.3 Computer-Services Stocks to Buy Right NowInnodata: This Zacks Rank #1 (Strong Buy) company is benefiting from strong demand for generative AI training data. Increasing demand for Agility is notable. You can see the complete list of today’s Zacks #1 Rank stocks here.Innodata now expects 2024 revenues to grow between 88% and 92% compared with its previous guidance of 60% growth.The Zacks Consensus Estimate for INOD’s 2024 earnings has been steady at 21 cents per share over the past 30 days. The stock has surged 464% year to date.CSG Systems International: This Zacks Rank #2 (Buy) company is benefiting from new logo sales wins and deal expansions.CSGS now expects to deliver organic revenue growth for 2024 in line with its long-term guidance of 2% to 6%. It is benefiting from strong performance from its top two customers, Charter and Comcast.CSG recently announced that it has extended its contract with Comcast through year-end 2030.The Zacks Consensus Estimate for CSGS’ 2024 earnings has increased by a couple of cents to $4.28 per share over the past 30 days. The stock has returned 5.6% in the year-to-date period.CACI International: This Reston, VA-based IT applications and infrastructure provider is benefiting from new business wins and organic expansions. This Zacks Rank #2 company’s disciplined business development actions, consistent operational excellence and high customer satisfaction help it win new deals regularly.CACI’s sustained focus on its strategy to grow in larger markets and leverage mergers and acquisitions to further increase its market share and create long-term value for its shareholders is praiseworthy.The Zacks Consensus Estimate for CACI’s fiscal 2025 earnings has increased by four cents to $23.17 per share over the past 30 days. The stock has returned 76.8% in the year-to-date period.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release. 7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CACI International, Inc. (CACI): Free Stock Analysis Report CSG Systems International, Inc. (CSGS): Free Stock Analysis Report Innodata Inc. (INOD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks