Zacks Industry Outlook CACI International, CSG Systems International and Innodata

Core Viewpoint - The Zacks Computer Services industry is currently facing macroeconomic challenges, but companies like CACI International, CSG Systems International, and Innodata are benefiting from the ongoing digital transformation and increased demand for cloud-enabled software solutions [1][2]. Industry Overview - The Zacks Computer Services industry includes companies that provide cloud and software-based solutions, such as consulting, research, security, and software application development, serving various sectors including government, finance, and healthcare [3][4]. Industry Trends - The rise of remote and hybrid work is expected to boost industry growth as enterprises seek flexible cloud solutions [5]. - Increasing cyber-attacks are driving demand for cybersecurity solutions, particularly among government agencies [6]. - Regulatory compliance is creating opportunities for industry players to assist clients in navigating complex network systems and sensitive information environments [7]. Industry Performance - The Zacks Computer Services industry has underperformed compared to the broader Zacks Computer and Technology sector and the S&P 500 Index, with a 27.4% increase over the past year, while the S&P 500 rose by 36% and the sector by 40.3% [10]. - The industry is currently trading at a forward 12-month P/E of 20.29X, lower than the S&P 500's 22.66X and the sector's 27.35X [11]. Notable Companies - Innodata: This company is experiencing strong demand for generative AI training data, with expected revenue growth of 88% to 92% for 2024 [12]. The stock has surged 464% year-to-date [13]. - CSG Systems International: Benefiting from new sales and contract extensions, CSG expects organic revenue growth of 2% to 6% for 2024 [13]. The stock has returned 5.6% year-to-date [14]. - CACI International: This company is focused on business development and operational excellence, with a consensus estimate for fiscal 2025 earnings increasing to $23.17 per share [15][17]. The stock has returned 76.8% year-to-date [17].