CACI
CACI
$467.43
+6.05%
CACI International Inc is a leading provider of information solutions and services, primarily serving agencies and departments of the U.S. government in the defense, intelligence, and federal civilian sectors. As a trusted partner in national security and government modernization, CACI distinguishes itself through deep domain expertise and a broad portfolio spanning functional software development, data analytics, IT operations, and life cycle support. The current investor narrative centers on the company's steady revenue growth driven by sustained government spending, while margin expansion and free cash flow generation are key focal points amid a volatile macro environment. Recent quarterly results underscore robust demand, but the stock has faced headwinds from broader market rotation and valuation compression.…
CACI
CACI
$467.43
Investment Opinion: Should I buy CACI Today?
Rating: Hold. CACI offers a compelling risk/reward at current levels given its 41.8% upside to the average analyst target of $654.36 and a forward P/E of 14.79x that is a 33% discount to the industry. However, the stock's severe downtrend and near-term momentum warrant caution, making a Hold appropriate until a reversal is confirmed.
Supporting evidence: The primary valuation metric—forward P/E of 14.79x—is well below the industry average of ~22x, while the PEG ratio of 1.07 suggests fair pricing relative to expected growth. Revenue growth of 8.49% YoY is solid, and free cash flow of $625.7 million provides financial strength. The consensus Buy rating and average target imply significant upside, but the trailing P/E of 21.21x is near the high end of its historical range, tempering enthusiasm.
Risks & Conditions: The biggest risks are continued price deterioration (down 27.4% in six months) and potential earnings misses. This Hold would upgrade to Buy if the stock breaks above its 50-day moving average or if forward P/E compresses below 12x. It would downgrade to Sell if revenue growth decelerates below 5% or if the stock breaks below the 52-week low of $434.70. Overall, CACI appears fairly valued relative to its growth and cash flow, but the market's bearish sentiment suggests waiting for a clearer entry point.
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CACI 12-Month Price Forecast
CACI's fundamentals are solid with 8.5% revenue growth, strong free cash flow, and a forward P/E that is a 33% discount to the industry. However, the stock's severe downtrend and underperformance relative to the market create significant uncertainty. The base case of a gradual recovery to the average target of $654 is most likely, but the bear case of testing the 52-week low cannot be dismissed given the momentum. A neutral stance is warranted until the stock shows signs of bottoming, such as a break above its 50-day moving average or a positive earnings surprise. Upgrading to bullish would require a sustained price recovery above $510, while a break below $435 would trigger a bearish downgrade.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CACI's 12-month outlook, with a consensus price target around $644.00 and implied upside of +37.8% versus the current price.
Average Target
$644.00
0 analysts
Implied Upside
+37.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$510 - $800
Analyst target range
CACI is covered by 14 analysts, with a consensus recommendation of 'Buy' (mean rating of 1.56 on a 1-5 scale, where 1 is Strong Buy). The average price target is $654.36, implying a substantial 41.8% upside from the current price of $461.56. The distribution shows a bullish lean, with the majority of analysts recommending Buy or Overweight, and no Sell ratings. Recent ratings from TD Cowen (Buy), JP Morgan (Overweight), and Jefferies (Hold) indicate a generally positive but cautious sentiment. The target range spans from a low of $510.00 to a high of $800.00, representing a wide spread of $290, or 56.8% of the average target. This wide dispersion signals high uncertainty about the company's future performance. The low target of $510 implies only 10.5% upside and may reflect concerns about margin compression or slower government spending. The high target of $800 suggests expectations of significant growth acceleration, possibly from new contract wins or margin expansion. The consensus EPS estimate for the current fiscal year is $36.50, with a range of $35.57 to $37.75, indicating relatively tight confidence in near-term earnings. The revenue estimate of $11.92 billion implies continued mid-single-digit growth. Overall, the analyst community is optimistic but acknowledges risks, as evidenced by the wide target spread.
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Bulls vs Bears: CACI Investment Factors
CACI presents a classic value-versus-momentum tension. On the bull side, the company delivers solid 8.5% revenue growth, robust free cash flow of $625.7 million, and a forward P/E of 14.79x that is a 33% discount to the industry average. Analyst consensus is Buy with a 41.8% average upside. On the bear side, the stock is in a deep downtrend, underperforming the market by 22% over the past year, and the trailing P/E of 21.21x is near the high end of its historical range. The wide analyst target spread signals high uncertainty. Currently, the bearish momentum is stronger, but the valuation and fundamentals provide a compelling case for patient investors. The single most important tension is whether CACI can deliver the earnings growth implied by its forward P/E—if it does, the stock could re-rate significantly; if it disappoints, further downside toward the 52-week low of $434.70 is possible.
Bullish
- Strong Revenue Growth: CACI's Q3 FY2026 revenue grew 8.49% YoY to $2.351 billion, accelerating from prior quarters and driven by broad-based government demand. This consistent mid-to-high single-digit growth provides a stable foundation for earnings expansion.
- Significant Analyst Upside: The average analyst price target of $654.36 implies 41.8% upside from the current $461.56, with a consensus Buy rating (1.56 on 1-5 scale). Even the low target of $510 offers 10.5% upside, suggesting limited downside risk from current levels.
- Attractive Forward Valuation: The forward P/E of 14.79x represents a 33% discount to the industry average of ~22x, while the PEG ratio of 1.07 suggests the stock is reasonably priced relative to expected earnings growth. This valuation gap could close as earnings materialize.
- Robust Free Cash Flow: CACI generated $625.7 million in free cash flow over the trailing twelve months, providing ample capacity for debt reduction, share buybacks, or strategic investments. The strong FCF yield supports financial flexibility and shareholder returns.
Bearish
- Severe Price Downtrend: CACI has declined 27.4% over the past six months and 3.8% over the past year, dramatically underperforming the S&P 500's 18.4% gain. The stock sits at only 67.5% of its 52-week range, deep in the lower quartile, indicating persistent bearish sentiment.
- High Trailing P/E vs History: The trailing P/E of 21.21x is near the high end of its five-year range (11x-23x), suggesting the stock is not cheap on a historical basis. This valuation leaves little room for error if earnings disappoint.
- Wide Analyst Target Dispersion: Analyst targets range from $510 to $800, a spread of 56.8% of the average target, reflecting high uncertainty. This dispersion suggests significant disagreement about the company's future prospects and earnings trajectory.
- Low Beta Offers No Hedge: With a beta of 0.541, CACI is less volatile than the market, but its decline is company-specific rather than macro-driven. The low beta also implies any recovery may be gradual, limiting near-term upside potential.
CACI Technical Analysis
CACI is in a pronounced downtrend, with the stock declining 3.76% over the past year while the S&P 500 gained 18.35%, resulting in significant relative underperformance. The current price of $461.56 sits at just 67.5% of its 52-week range (low $434.70, high $683.50), deep in the lower quartile, suggesting bearish sentiment and potential value territory but also risk of further downside if fundamentals deteriorate. The 52-week low of $434.70 is only 6.2% below the current price, making it a critical support level. Short-term momentum remains negative, with the 1-month price change of -6.74% and 3-month change of -12.44% accelerating the decline. This contrasts with the S&P 500's positive 1-month and 3-month returns of 0.31% and 4.67%, respectively, highlighting CACI's severe relative weakness. The divergence between the 1-year downtrend and the recent acceleration in selling pressure suggests a potential capitulation phase, but no reversal signals are evident yet. The 52-week high of $683.50 represents a 48% upside from current levels, serving as a major resistance zone. A break above this level would signal a trend reversal, while a breakdown below the 52-week low of $434.70 could trigger further selling. CACI's beta of 0.541 indicates it is significantly less volatile than the market, meaning the stock's decline is not driven by broad market moves but by company-specific factors. The low beta also implies that any recovery may be gradual rather than sharp.
Beta
0.54
0.54x market volatility
Max Drawdown
-33.4%
Largest decline past year
52-Week Range
$435-$684
Price range past year
Annual Return
-2.1%
Cumulative gain past year
| Period | CACI Return | S&P 500 |
|---|---|---|
| 1m | +3.9% | +0.4% |
| 3m | -11.2% | +5.5% |
| 6m | -29.4% | +8.4% |
| 1y | -2.1% | +18.9% |
| ytd | -13.0% | +9.6% |
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CACI Fundamental Analysis
CACI's revenue trajectory remains solidly growth-oriented, with the most recent quarter (Q3 FY2026, ended March 31, 2026) reporting revenue of $2.351 billion, an 8.49% year-over-year increase. This marks an acceleration from the prior year's Q3 revenue of $2.167 billion and continues a multi-quarter trend of mid-to-high single-digit growth, with the previous four quarters showing revenues of $2.220 billion, $2.288 billion, $2.304 billion, and $2.167 billion. The growth is driven by both the Technology Service segment ($1.327 billion) and Service, Other ($1.024 billion), reflecting broad-based demand from government clients. The consistent revenue expansion supports the investment case for a stable, government-backed growth story. Profitability is healthy and improving, with net income of $130.4 million in Q3 FY2026, up from $111.9 million in the year-ago quarter. Gross margin stood at 31.44% in Q3 FY2026, a significant improvement from the 9.26% reported in Q2 FY2026 (which was impacted by a change in cost allocation), indicating strong operating leverage. Net margin of 5.55% is stable and typical for the government services industry. The company is profitable with a trailing EPS of $5.91, and operating margin of 9.74% reflects efficient cost management. CACI maintains a solid balance sheet with a debt-to-equity ratio of 0.86, manageable leverage, and a current ratio of 1.47, indicating adequate liquidity. Free cash flow (TTM) of $625.7 million is robust, providing ample capacity for internal investment and debt reduction. The ROE of 12.84% is attractive, and the company does not pay a dividend, instead reinvesting in growth. The strong free cash flow yield (FCF/EV) supports financial flexibility and reduces reliance on external financing.
Quarterly Revenue
$2.4B
2026-03
Revenue YoY Growth
+8.5%
YoY Comparison
Gross Margin
31.4%
Latest Quarter
Free Cash Flow
$625689000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CACI Overvalued?
Given CACI's positive net income, the primary valuation metric is the P/E ratio. The trailing P/E stands at 21.21x, while the forward P/E is 14.79x, implying the market expects significant earnings growth in the coming year. The gap between trailing and forward P/E suggests that analysts anticipate a sharp earnings acceleration, which is a positive signal if realized. Compared to the Information Technology Services industry average P/E of approximately 22x (based on available data), CACI's trailing P/E of 21.21x is roughly in line, representing a slight 4% discount. However, the forward P/E of 14.79x is a substantial 33% discount to the industry forward average of about 22x, indicating that the market is pricing in below-average growth expectations relative to peers. This discount may be justified by CACI's lower growth profile compared to high-growth IT services firms, but it also presents potential value if the company can deliver on earnings estimates. Historically, CACI's trailing P/E has ranged from roughly 11x to 23x over the past five years. The current 21.21x is near the high end of that range, suggesting the stock is not cheap on a historical basis. However, the forward P/E of 14.79x is near the lower end of the historical forward range, implying that the market is pricing in a significant earnings rebound. This dichotomy reflects the tension between near-term earnings headwinds and expected future growth. The P/B ratio of 2.72x is also elevated relative to the industry average of around 3.0x, but the ROE of 12.8% supports the premium.
PE
21.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 17x~24x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
14.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: CACI's debt-to-equity ratio of 0.86 is manageable but not negligible, and interest expense of $52.3 million in Q3 FY2026 consumes a portion of operating income. The company's net margin of 5.55% is typical for government services but leaves little buffer against cost overruns or contract renegotiations. Revenue concentration in U.S. government clients (vast majority of sales) creates dependency on federal budget cycles and political priorities. Any sequestration or budget cuts could directly impact revenue growth, which is currently 8.49% YoY.
Market & Competitive Risks: The stock's trailing P/E of 21.21x is near the high end of its five-year range, making it vulnerable to multiple compression if growth slows or interest rates remain elevated. With a beta of 0.541, CACI is less correlated to the market, but its severe underperformance (down 27.4% in six months) suggests company-specific headwinds. The IT services industry is competitive, with peers like Booz Allen and Leidos vying for contracts. No recent news highlights specific threats, but the wide analyst target spread (56.8% of average) indicates high uncertainty about competitive positioning.
Worst-Case Scenario: In a prolonged downturn, CACI could face contract delays, margin compression, and multiple contraction. If the stock revisits its 52-week low of $434.70, an investor buying at $461.56 would lose approximately 5.8%. However, if earnings disappoint and the P/E compresses to its historical low of 11x, the stock could fall to around $200 (based on trailing EPS of $5.91), representing a 56.7% loss. While this extreme scenario is unlikely given the government contract base, it highlights the risk if growth stalls and valuation de-rates.
FAQ
The key risks are: 1) Financial risk: Debt-to-equity of 0.86 and interest expense of $52.3 million per quarter, though manageable, could become burdensome if earnings decline. 2) Competitive risk: The IT services industry is competitive, and loss of a major government contract could hurt revenue growth, which is currently 8.49% YoY. 3) Macro risk: Government budget cuts or sequestration could directly impact CACI's revenue, as the vast majority comes from U.S. agencies. 4) Valuation risk: The trailing P/E of 21.21x is near the high end of its historical range, leaving limited upside if earnings disappoint. The most severe risk is a prolonged downturn that pushes the stock below its 52-week low of $434.70, representing a 5.8% downside from current levels.
The 12-month forecast is cautiously optimistic. The base case (50% probability) sees the stock reaching the analyst average target of $654.36, driven by steady revenue growth and margin stability. The bull case (25% probability) targets $654-$800, fueled by new contract wins and multiple expansion. The bear case (25% probability) sees the stock falling to $435-$510, if growth slows or budget cuts materialize. The most likely scenario is the base case, assuming CACI maintains its 6-8% revenue growth and generates free cash flow above $600 million. The wide target range reflects high uncertainty, but the consensus Buy rating and 41.8% upside suggest analysts expect a recovery.
CACI appears undervalued on a forward basis but fairly valued on a trailing basis. The forward P/E of 14.79x is a 33% discount to the industry average of 22x, and the PEG ratio of 1.07 suggests reasonable pricing relative to expected earnings growth. However, the trailing P/E of 21.21x is near the high end of its five-year range of 11x-23x, indicating that the stock is not cheap historically. The P/B ratio of 2.72x is below the industry average of ~3.0x, and the EV/EBITDA of 14.42x is reasonable. Overall, the market is pricing in below-average growth expectations, creating a potential value opportunity if CACI can deliver on earnings estimates.
CACI offers a compelling risk/reward for patient investors. The stock trades at a forward P/E of 14.79x, a 33% discount to the IT services industry average of ~22x, and analysts see 41.8% upside to the average target of $654.36. The company generates strong free cash flow of $625.7 million and has a solid revenue growth trajectory of 8.49% YoY. However, the stock is in a severe downtrend, down 27.4% over six months, and the trailing P/E of 21.21x is near the high end of its historical range. For long-term investors willing to withstand near-term volatility, CACI is a good buy at current levels. For short-term traders, the lack of momentum makes it less attractive until a reversal is confirmed.
CACI is better suited for long-term investment. The stock has a beta of 0.541, indicating low volatility, but its recent downtrend (down 27.4% in six months) makes it unsuitable for short-term trading. The company does not pay a dividend, so returns come from capital appreciation. With steady government-backed revenue growth and strong free cash flow, CACI is a solid long-term hold for investors with a horizon of 12-18 months or more. Short-term traders should wait for a confirmed reversal above $510 before entering. The low beta suggests any recovery will be gradual, rewarding patient investors who can ride out near-term volatility.
