Bill Loomis
Bill Loomis (wrloomis@stifel.com) is a managing director at Stifel Nicolaus. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. For additional information and current disclosures for the companies discussed herein, go to the research page at www.stifel.com.
The administration’s mandate to bring more work in-house will substantially change the acquisition status quo.
Despite a recent dip in contract activity, IT and professional services companies expect their revenues to bounce back next year.
Even though the trends for federal information technology and professional services firms look solid during the next few years, government spending pressures and the trend toward insourcing are giving investors reason to worry.
The fiscal 2010 information technology budget request and the 60-day cybersecurity review reveal how the Obama administration regards information technology as a key factor in moving its agenda forward.
Areas for potential growth exist in the federal information technology and professional services sector despite a recent slowing of contract award activity.
Federal information technology and professional services companies are generally reporting good financial results and raising their future guidance.
A new administration and cybersecurity will spur growth for well-positioned federal information technology companies.
Despite facing tighter budgets, tougher competition, and heavier oversight and regulation burdens, the federal IT and professional services industry is a relatively bright spot on Wall Street.
Federal IT and professional services stocks have rallied over the past couple of months due to good second-quarter earnings reports and investors seeking less economically sensitive investments. And the federal IT group has almost broken even for the year.
With the changes in Congress and the presidency, and a tougher budget environment ahead, companies will have to be even more flexible and agile to maintain growth during the coming years.