CACI International (CACI) Following New Defense Contract Wins Still Looks Undervalued
Recent contract wins put CACI International in focus
CACI International (CACI) has secured two multi year U.S. defense contracts worth up to a combined US$293 million, keeping the stock in focus for investors monitoring government technology spending.
Recent contract awards appear to have kept interest in CACI International alive, with the share price delivering a 20.18% year to date return and a 3-year total shareholder return of 99.12%, even though the 90-day share price return has declined 3.60% as momentum has cooled slightly in recent months.
Scan defense-focused contractors moving on similar U.S. government awards by checking the hand picked 30 resilient stocks with low risk scores alongside CACI International.
CACI International now trades with a strong multi year return behind it and fresh contract wins in hand. Does the current price still offer a compelling trade off between risk and potential reward, or has most of the upside been used?
Most Popular Narrative: 12% Undervalued
CACI International closed at $645.88, while the analyst consensus Narrative on Simply Wall St anchors fair value at $735.21. This frames the recent contract wins within a broader view that still sees upside based on backlog, mix, and margins under a discount rate of 8.07%.
The main thing that has to go right is that CACI International converts its growing electronic warfare, counter UAS, and space program wins, along with expanded nontraditional procurement channels, into sustainably higher margins and free cash flow despite concerns about free cash flow margin and returns on capital.
The numbers imply that CACI International’s share price embeds a discount to a business generating at least US$900m of free cash flow in FY27 and at least US$2.1b over FY25 to FY27 with EBITDA margins in the high 12% range. This narrative views that as consistent with an undervalued and bullish setup.
See why 28 investors see CACI International as 12% undervalued.
Result: Fair Value of $735.21 (UNDERVALUED)
Still, CACI International’s narrative could be tested if free cash flow margins stay weak, or if execution on the US$32b backlog and defense tech programs disappoints.
Find out about the key risks to this CACI International narrative.
Next Steps
Mixed signals on CACI International so far, with contracts, valuation upside, and execution questions all in play, mean you are better off weighing the evidence yourself and building your own stance quickly. To see how the trade off between those worries and potential positives currently looks, review the 3 key rewards and 1 important warning sign
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