Thursday, May 7, 2020

DLH Holdings Corp. (DLHC)

Beats Top and Bottom Lines; Expect VA-CMOP to be Extended

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q20 Results. Revenue of $54.8 million and EPS of $0.16. We were projecting revenue of $54 million and EPS of $0.14, while consensus was $52.6 million and $0.13, respectively. Last year, revenues were $33.8 million and EPS was $0.10. The y-o-y revenue increase includes the S3 contribution while the Company's legacy operations also grew steadily, reflecting increased volume to the VA and other agencies.

VA-CMOP Extension? During the quarter, the government canceled the previously-issued RFP for the VA pharmacy contracts. The RFP included a requirement that the prime contractor be a service-disabled veteran owned small business, which would have precluded DLH from continuing in the prime contractor role. Although the government has not indicated its future procurement strategy, we would expect DLH's current contracts for these services to be extended for...

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report.  NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.