Dealing with government agencies can sometimes be difficult, but there is a firm in Olathe, Kansas, that understands the process and moves you right to the head of the virtual line.

NIC Inc. (NASDAQ:EGOV) helps government agencies establish and maintain internet sites. It enters into long-term contracts with clients to design, build, and operate Web-based portals on their behalf. These portals enable businesses and citizens to access government information online and complete a variety of transactions, including license renewals, permit applications, record retrieval and form filing. NIC provides eGovernment solutions for some 2,200 state and local agencies that serve more than 60 million people across the United States.

The company pleased the Street last week, when it announced Q4 EPS of three cents and revenues of $18.8 million. Analysts had been looking for three cents and $17.2 million. Management also guided FY07 revenues to $80.0-$81.5 million, versus consensus of $77.29 million. The CFO remarked that 2007 portal margins should fall in the 45-47 percent range, as the firm continues to reinvest in the business. The news popped EGOV shares past 200-day moving average resistance into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside. Note that the 200-day curve is now supporting the price.

Brokers recommend the issue with three "buys" and one "hold". Analysts see a 50 percent growth rate, through the next year. The EGOV Price to Book ratio (3.45), Price to Free Cash Flow ratio (14.95), Operating Margin (22.62%) and Net Profit Margin (15.05%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 45 percent of the outstanding EGOV shares. Over the past fifty-two weeks, the stock has traded between $4.44 and $7.52. A stop-loss of $4.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.