Shares of Conduent (CNDT -0.28%) are gaining ground in Wednesday's trading. The company's share price was up roughly 7.6% in the daily session as of noon ET. Meanwhile, the S&P 500 index was down roughly 0.2% and the Nasdaq Composite index was off roughly 0.4%.
Conduent published a press release before the market opened announcing that the Bay Area Toll Authority (BATA) had renewed its contract with the company. The five-and-a-half-year contract extension will see Conduent provide processing for automated tolling transactions at the Golden Gate Bridge and seven other bridges in the San Francisco area.
As per Conduent's announcement, the new BATA contract is valued at roughly $286 million. For comparison, the company recorded annual revenue of $4.14 billion with its recently reported 2021 results. Conduent operates six of the 10 largest electric tolling systems in the U.S., and news of the contract extension in California follows its recent announcement of three eight-year contract extensions in New York.
With most of its business coming from government customers, Conduent's performance tends to be fairly steady and predictable. The company is forecasting a slight sales drawdown this year due to a reduction in government stimulus volumes, with management's target for sales between $3.83 billion and $3.98 billion suggesting a 5.8% sales contraction at the midpoint of guidance. However, Conduent is guiding for sales to grow between 1% and 4% in 2023.
With today's gains, the company's share price is roughly flat across the past year of trading. Conduent now has a market capitalization of roughly $1.1 billion and trades at approximately 14.5 times this year's expected earnings.