Growth Across the Business. Although a decline in "pass through" revenue was the cause of the lighter-than-projected revenue, DLH saw growth across its business segments. VA-related revenue grew to $24.8 million in the quarter, up from $23.1 million in the year ago period. HHS-related revenue grew to $23.3 million from $14.3 million in the year ago period, driven by the inclusion of S3 for the entire quarter versus a partial quarter last year. Other revenue improved to $3.4 million from $1.3 million.Adjusted Earnings. On a reported basis, DLH generated net income of $2.1 million, or $0.16 per share, in the fiscal third quarter compared to $0.8 million, or $0.06 per share, in the year ago period. Adjusting for the $1.2 million of acquisition related costs in last year's quarter, the Company reported adjusted net income of $1.7 million, or $0.13 per share, for the third quarter of fiscal 2019.Opportunity Set Growing. The recently announced $15 million of COVID-related contract awards are the tip of the iceberg, in our view. We believe DLHC continues to expand its opportunity set in its key customers. The recent executive additions, a new leader for S3 and a Chief Growth Officer, should enable the Company to continue to capitalize on its core strengths and longstanding demand for the Company's services.Updated Projections. We are now projecting revenue of $54 million, EBITDA of $5.4 million, and EPS of $0.14 for the fiscal fourth quarter. For the full fiscal year, we are projecting revenue of $212.5 million, EBITDA of $21.4 million, and EPS of $0.58.Maintaining Outperform Rating and $11.00 Price Target.. We are maintaining our Outperform rating and our twelve month price target of $11.00 per share. At our price target, DLHC shares would trade at 8.8x our fiscal 2020 adjusted EBITDA estimate and 0.9x our fiscal 2020 revenue estimate, still significant discounts to its peer group.Read More >>