On Thursday, Jefferies updated its outlook on CACI International (NYSE:CACI), increasing the price target to $595 from the previous $570 while keeping a Hold rating on the stock. The adjustment comes ahead of CACI International's Investor Day scheduled for November 8th, which will be the first event of its kind since September 2019.
The financial firm anticipates that the upcoming Investor Day may provide insights into the company's long-term financial strategy.
Although no long-term financial framework was provided during the Fiscal Year 2020 Investor Day, there is an expectation for CACI to achieve a mid-single-digit organic growth compound annual growth rate (CAGR) through to Fiscal Year 2027, estimated at around 5%, which is in line with consensus total revenue CAGR projections.
The analysis by Jefferies takes into account the accretion from CACI's Azure cloud platform, which is expected to contribute an additional 40 basis points to the Fiscal Year 2025 operating margin, resulting in 11.3%.
However, the firm does not anticipate further expansion beyond Fiscal Year 2025. Based on these projections, Jefferies estimates that CACI's earnings per share (EPS) could land between $28.00 and $28.50 by Fiscal Year 2027.
Jefferies' outlook also suggests that the Investor Day event may offer CACI International an opportunity to clarify its capital deployment plans. The company's management strategies and financial targets are likely to be key topics of discussion during the event, which investors and analysts will be closely monitoring for indications of the company's future growth trajectory and profitability.
In other recent news, CACI International has secured a $750 million Term Loan B Facility, instrumental in partially funding the acquisition of Azure Summit Technology, LLC. This acquisition, completed for a total cash consideration of $1.275 billion, is expected to impact CACI's operations and market positioning. In addition, CACI has been awarded a five-year task order from the U.S. Southern Command Operations, valued at up to $226 million.
On the financial front, CACI started the fiscal year 2025 robustly, with an 11% increase in Q1 revenue, reaching nearly $2.1 billion. The company has raised its revenue guidance for FY 2025 to between $8.1 billion and $8.3 billion.
hese are recent developments, providing investors with the latest updates on CACI International's strategic efforts to enhance its financial standing and operational efficiency.
InvestingPro Insights
CACI International's strong financial performance aligns with Jefferies' positive outlook. According to InvestingPro data, CACI has demonstrated impressive growth with a 74.23% year-to-date price total return and a 73.38% one-year price total return. This robust performance is reflected in the company's market capitalization of $12.57 billion.
InvestingPro Tips highlight that CACI operates with a moderate level of debt and has liquid assets exceeding short-term obligations, which supports the company's financial stability. Additionally, analysts predict the company will remain profitable this year, reinforcing Jefferies' positive EPS projections for the coming years.
It's worth noting that CACI's P/E ratio of 27.42 suggests the stock is trading at a premium relative to its near-term earnings growth. This valuation metric could be a point of interest during the upcoming Investor Day, as stakeholders may seek clarification on how the company plans to justify and sustain this valuation through its growth strategies.
For investors looking for a deeper analysis, InvestingPro offers 13 additional tips on CACI International, providing a comprehensive view of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.