Leading information technology (IT) and consulting company Computer Science Corporation (CSC) recently disclosed that it is witnessing growing demand for business intelligence (BI) solutions in the insurance, annuity and self-insurance markets. In response to the surge in demand, the tech major has decided to enhance the capability of its Insurance Optics Business Analytics software.
This software, which is already popular among insurance companies, has been selected by 12 life insurance and annuity companies in the past year, while 25 other firms have already licensed it. This apart, the software leverages SAP BusinessObjects Enterprise and Xcelsius Enterprise solutions and generates 300 industry-specific, analytical reports which could be useful to other companies in the insurance space.
CSC is on a winning spree, grabbing big deals at regular intervals. We believe that the enhanced version of the business analytics software is expected to facilitate new deal wins. This ability is expected to help the company achieve new heights in its business and scale up business volume. After winning and extending several contracts during the first half of May, the company has recently grabbed a $33.0 million contract from the U.S. Navy.
This apart, the company has been awarded another contract for an estimated value of $25.0 million from the Space and Naval Warfare Systems Center Atlantic. So it is evident that the company is seeing significant success in the government vertical. We believe that the new version of the business analytics software will help the company to penetrate the government insurance segment, which typically generates steady flow of revenue and is, therefore, relatively stable.
The company reported decent fourth quarter results and provided a positive outlook for fiscal year 2010. The company is constantly growing through acquisitions that enhance its services portfolio and expand its operations in new markets. It has a steady flow of new business, especially in the government vertical and is financially sound.
Things look encouraging for CSC, although the company is facing stiff competition from companies such as Accenture (ACN), Hewlett-Packard (HPQ) and CA Inc. (CA). Greater business diversification can further strengthen its business model.
We maintain a Neutral rating on the stock.
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