Time for NIC, Inc?

NIC, Inc. (symbol EGOV) is a company that provides online services for local governments. Their digital offerings allow citizens to interact with various government entities.

Why am I writing about NIC? First of all, because we seem to be in a moment when citizens are being asked to avoid being in contact with each other whenever possible. Yet who has not stood in a seemingly endless line in a government office with fellow citizens and waited to be served by a weary government worker? As COVID-19 keeps us in our homes and we are being asked to avoid unnecessary travel, this could be a time when the online products offered by NIC may provide an alternative to the way we used to interact with our government.

The following describes what NIC provides:

Its portals consist websites and applications that enable businesses and citizens to access government information through online channels, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. The company’s portal service offerings include motor vehicle driver history record retrieval; vehicle title, lien, and registration; motor vehicle inspections; temporary vehicle tags; driver’s license renewal; hunting and fishing licenses; health professional license services; professional license renewal; business registrations and renewals; secretary of state business searches; Uniform Commercial Code (UCC) searches and filings; limited criminal history searches; court services; vital records; income and property tax payments; and payment processing products and services. Its software & services business provides software development, payment processing, and other digital government services to state and local governments, as well as federal agencies. In addition, the company develops and manages the pre-employment screening program for motor carriers using transaction-based business model. Further, it offers application development and portal management services to governments.

All of these activities can be done entirely online using NIC’s products. This is a solution to the problem of keeping our government working for its citizens while avoiding gatherings of people.

The other reason I am writing about this company is because it just appeared on our Trend Leaders list and on our Swing Signals list. So the market seems to be thinking that NIC will be seeing better days as a result of the current coronavirus situation. After the pandemic subsides, many analysts are expecting that certain aspects of our way of life will change, much as they did after 9/11. Driving more interactions online is very likely to be one of those changes. Thus, it is certainly possible that NIC, Inc. will be able to ride this wave.

Here is the chart showing a strong recovery after lagging the S&P 500 (blue line) in the initial stages of this market collapse:

While the companies finances aren’t that great at the moment, there seems to be quite a bit of market sentiment that is expecting better days ahead. So yes, I think it is indeed time for NIC, Inc.

Disclosure: we do not hold any positions in EGOV