Friday, August 06, 2021

DLH Holdings (DLHC)
Post Call Update – A Deeper Dive

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.

Organic Growth Returns. DLH reported an estimated $2.8 million of organic growth in the quarter. Organic growth has faced headwinds from the absence of pass thru travel revenue due to COVID (which still hasn’t fully returned) and an expected reduction in scope of a HHS contract as the prior contract contained funds for an IT upgrade, which DLH successfully completed. We estimate this headwind at about $7 million annually over the five year contract term.


VA Logistics.  While we are disappointed the protest of the award continues to drag on, we are hopeful it will be resolved soon. We continue to believe DLH is well positioned to retain the contract given the quality and cost effectiveness DLH brings to the contract …

This Company Sponsored 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.