UBS analysts have adjusted their price target for CACI International (NYSE:CACI) upward to $787 from a previous $752, maintaining a Buy recommendation on the national security solutions provider. Trading currently near $669.91 per share, the stock carries a price-to-earnings ratio of 28.25, marking a premium relative to anticipated earnings growth in the near term.
This upward revision follows CACI's second-quarter fiscal results, with UBS emphasizing that the company’s strategic emphasis on software-centric, outcome-focused national security solutions increasingly differentiates it, particularly in the context of the current Administration’s policies and acquisition reforms. This strategic alignment has contributed notably to CACI’s substantial 55.45% return over the preceding year.
UBS highlights CACI's asset-light, rapid-turnover business model as a key advantage, positioning the firm to capitalize on accelerated spending within enhanced national security budgets. Simultaneously, CACI continues to expand its margin profile through a combination of organic growth and strategic acquisitions. The company reports a gross profit margin of 32.5%, alongside a 10.41% increase in revenue over the past twelve months.
Despite anticipated disruptions to revenue and bookings due to recent government shutdowns, UBS points to robust bookings over the last twelve months and a strong bid pipeline as indicators of accelerating revenue growth prospects, especially with the ongoing obligation of reconciliation funding. Reflecting this confidence, CACI’s share price remains near its 52-week high of $663.63.
Looking forward, CACI anticipates achieving or surpassing the upper bounds of its three-year targets for revenue, margins, and free cash flow. UBS projects sustained momentum for the company, highlighting the potential for surpassing consensus estimates and favorable re-rating dynamics as organic growth accelerates. Analyst price targets for CACI range from $635 to $800, with financial assessments affirming the company’s solid financial health.
Complementing UBS’s perspective, other financial institutions have similarly upgraded their price targets in light of CACI’s recent strong performance. Notably, Stifel increased its target to $765, crediting robust margins that offset slightly weaker-than-expected revenue. Truist Securities elevated its target to $800, citing positive estimate revisions and an improved growth outlook. Bank of America Securities also raised its target to $750, acknowledging stronger-than-expected margin and free cash flow expansion despite a slow environment for government contract awards. All maintain Buy ratings on the stock.
Regarding the company’s fiscal second-quarter earnings, CACI posted earnings per share of $6.81, exceeding expectations of $6.48, while revenue slightly missed forecasts at $2.2 billion compared to an estimated $2.27 billion. These results have reinforced analyst optimism.
The bullish sentiment toward CACI is supported by its strategic positioning within the national security sector, particularly benefiting from current governmental priorities and budget increases. Its business model's agility and profitability reflect conditions favorable for continued growth.