Is CACI International (CACI) A Bargain On Its Recent Pullback?
CACI International (CACI) has delivered a long track record of positive total returns, even as the stock has pulled back about 7% over the past month from its recent trading levels.
Recent trading has cooled, with the share price down about 7% over the past month. However, CACI International still carries a 90-day share price return of 22.38% and a 1-year total shareholder return of 25.25%. This points to momentum that has slowed in the short term but remains strong over a longer horizon as investors reassess growth potential and risk around the current US$621.17 level.
Scan beyond CACI International and compare its recent strength with a curated group of other momentum candidates in the 15 high quality undiscovered gems.
The recent slip after strong multi quarter gains can signal either a cooler view on CACI International or a mismatch between price and business strength. It is time to see what the current valuation actually implies.
Most Popular Narrative: 14.3% Undervalued
CACI International is framed as undervalued in the most followed narrative, with a fair value of $724.50 set against the latest close at $621.17.
Accelerated adoption of advanced technologies, such as software-defined platforms, cyber solutions, and enterprise software modernization, is driving a shift in federal procurement toward higher-value, tech-enabled contracts where CACI's existing leadership, strong track record, and investments ahead of customer need enable higher win rates, contract stickiness, and margin expansion.
Want to see what justifies that higher fair value on CACI International? The narrative leans on compound revenue growth, firmer margins, and a richer future earnings multiple.
Analysts contributing to this narrative build their $724.50 estimate using projected revenue expansion, modest margin uplift, and a higher P/E level than the wider US Professional Services group. Their assumptions also factor in earnings growth over several years and a discount rate of 8.1%, which ties the long term profile back to a present value for CACI International.
Result: Fair Value of $724.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
Still, the CACI International story depends heavily on US government budgets, as well as on managing supply chain and execution issues in areas like space and defense electronics.
Find out about the key risks to this CACI International narrative.
Another View On CACI International's Valuation
On a simple earnings lens, CACI International looks less generous. The stock trades on a P/E of 25.6x compared with a fair ratio of 22.8x and an industry average of 21.6x. That gap suggests investors already pay up for quality, so it is worth asking how much upside that leaves.
For a closer look at how that earnings multiple could evolve if the market gravitates toward the fair ratio, See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Mixed signals on CACI International so far. If you want to move quickly and decide where you stand, start by weighing the 3 key rewards and 1 important warning sign.
Looking for more investment ideas beyond CACI International?
Do not stop at one opportunity. Use the Simply Wall Street Screener to quickly spot other stocks that fit your style and sharpen your next move.
- Target resilient balance sheets by scanning the list of solid balance sheet and fundamentals (23 results) that pair financial strength with fundamental support.
- Zero in on potential mispricings by reviewing the 32 high quality undervalued stocks that combine quality with discounted valuations.
- Build a steadier income stream by checking the 6 dividend fortresses that focus on higher yields with a focus on resilience.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com