Is It Time To Reassess CACI International (CACI) After Strong Multi‑Year Share Price Gains

• If you are wondering whether CACI International at around US$562 per share still offers value, you are not alone. This article is designed to break that question down clearly.
• The stock has seen a 5.6% gain over the last week, a 5.2% decline over the last 30 days, and returns of 4.7% year to date, with 35.3% over 1 year, 90.3% over 3 years, and 135.4% over 5 years.
• Recent coverage has focused on CACI International’s role as a government services and technology contractor, along with ongoing contract wins and extensions that keep attention on its long term demand profile. These updates help explain why investors are reassessing both its growth potential and the risks they are willing to price in.
• CACI International currently scores 5 out of 6 on our valuation checks. Next, we will walk through what that means across different valuation methods, before finishing with a simple way to put all of these signals into context.

CACI International delivered 35.3% returns over the last year. See how this stacks up to the rest of the Professional Services industry.

Approach 1: CACI International Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash a business may generate in the future and discounts those cash flows back to today to arrive at an estimate of what the company could be worth now.

For CACI International, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections. The latest twelve month free cash flow is about $609.6 million. Analysts provide detailed estimates out to 2028, where free cash flow is projected at $792.6 million, and Simply Wall St extrapolates further out to 2035, with annual free cash flow projections remaining in the hundreds of millions of dollars.

Bringing all of those projected cash flows back to today, the DCF model arrives at an estimated intrinsic value of about $733.71 per share. Compared with the current share price of roughly $562, this implies a 23.3% discount, which indicates the stock appears undervalued according to this method.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests CACI International is undervalued by 23.3%. Track this in your watchlist or portfolio, or discover 884 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for CACI International.

Approach 2: CACI International Price vs Earnings

For a profitable company like CACI International, the P/E ratio is a useful way to relate what you pay for each share to the earnings the business is currently generating. In general, higher growth expectations and lower perceived risk tend to justify a higher P/E, while slower expected growth or higher risk usually point to a lower, more conservative multiple.

CACI International is trading on a P/E of 24.6x. That sits close to the Professional Services industry average of about 24.8x, and below the peer group average of 39.1x. Simply Wall St also calculates a proprietary “Fair Ratio” of 25.5x for CACI International, which reflects factors such as its earnings growth profile, industry, profit margins, market cap and company specific risks.

This Fair Ratio aims to be more tailored than simple peer or industry comparisons because it adjusts for company specific characteristics rather than assuming all firms deserve the same multiple. Comparing the current P/E of 24.6x with the Fair Ratio of 25.5x suggests the shares trade below that modelled fair level, indicating that the stock appears undervalued on this approach.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your CACI International Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you and other investors connect a clear story about CACI International’s backlog strength and funding risks to specific forecasts for revenue, earnings and margins. You can then compare the resulting Fair Value to today’s price to decide whether it looks attractive or stretched, and see that view update automatically as fresh news or earnings are added. One CACI narrative currently anchors on a Fair Value of about US$659, while another, more cautious view may sit closer to the analyst consensus target of roughly US$564.

Do you think there's more to the story for CACI International? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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