- For investors wondering if CACI International at around US$563 per share still offers value after a strong run, this article explains what the current price may be implying about the stock.
- The share price is US$563.67 after a 7% decline over the last week and a 7.6% decline over the last month. Despite this, the 1 year return is 51%, and the 3 year and 5 year returns are 90.2% and 126.7% respectively.
- Recent coverage has focused on the stock's strong multi year performance and the pullback in the last month, which has caught the attention of investors who track entry points after periods of strength. Commentary has also highlighted that the current level still leaves the year to date return at 4.9%, so some investors are weighing whether this is a pause or a potential change in risk perception.
- CACI International currently scores 5 out of 6 on Simply Wall St's valuation checks. The rest of this article will walk through the key valuation methods behind that score and then point you to a more holistic way to think about value at the end.
Approach 1: CACI International Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and discounting them back to today’s dollars. It is essentially asking what future cash the company might generate and what that stream is worth right now.
For CACI International, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $637.3 million. Analysts provide explicit Free Cash Flow estimates out to 2028, and Simply Wall St then extrapolates further to build a 10 year path, with projected Free Cash Flow of $1,074.8 million in 2035 based on those inputs and estimates.
Discounting this stream of projected cash flows back to today gives an estimated intrinsic value of about $810.76 per share. Compared with the current share price of roughly $563.67, the DCF output suggests the shares trade at a discount of about 30.5%. On this model, the stock appears undervalued.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests CACI International is undervalued by 30.5%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.
Approach 2: CACI International Price vs Earnings
For profitable companies, the P/E ratio is a useful way to connect what you pay for each share with the earnings that support that price. Investors usually expect higher P/E ratios when they see stronger growth potential and lower perceived risk, and lower P/E ratios when growth is more modest or risks feel higher.
CACI International currently trades on a P/E of about 24x. That sits above the Professional Services industry average of roughly 18.4x, but below the peer group average of around 26.2x. So the market is pricing CACI International at a premium to the broader industry, yet not at the top end of its closer peer set.
Simply Wall St’s Fair Ratio for CACI International is 24.5x. This is a proprietary estimate of what a reasonable P/E could be, based on factors such as earnings growth, profit margins, the company’s industry, market cap and specific risks. Because it is tailored to the company, the Fair Ratio can be more informative than a simple comparison with industry or peer averages. With the current P/E near 24x and the Fair Ratio at 24.5x, the valuation looks about in line with what these fundamentals suggest.
Result: ABOUT RIGHT
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Upgrade Your Decision Making: Choose your CACI International Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced as a simple way for you to attach a clear story about CACI International to the numbers you see. They link your assumptions for future revenue, earnings and margins to a Fair Value that can be compared with the current share price to guide buy or sell timing. This all takes place inside Simply Wall St’s Community page, where these Narratives update automatically as news or earnings arrive. For example, one CACI view might lean toward a higher Fair Value around US$800 based on assumptions closer to the more optimistic analyst targets, while another might sit closer to US$392.71 on more cautious expectations, giving you a transparent range of perspectives to benchmark your own.
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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