CACI
CACI
$623.01
-0.83%
CACI International Inc is a leading information solutions and services provider, primarily serving U.S. government agencies and departments across intelligence, defense, and federal civilian markets. The company specializes in national security missions and government modernization, offering services such as software development, data analysis, IT operations, and life cycle support. As a key player in the federal IT services sector, CACI competes with other defense and government contractors, leveraging its deep domain expertise and long-standing relationships. The current investor narrative centers on CACI's robust growth trajectory, driven by increased defense spending and digital modernization initiatives, alongside a recent sharp rebound in its stock price following a mid-year dip, reflecting renewed confidence in its strategic positioning and contract wins.…
CACI
CACI
$623.01
Investment Opinion: Should I buy CACI Today?
Based on the analysis, CACI is rated a Buy. The company's strong revenue growth, improving margins, and defensive characteristics, combined with a consensus analyst target of $724.50 (15.3% upside), support a positive outlook. The stock's beta of 0.541 and 1-year return of +30.95% versus the S&P 500's +18.56% highlight its attractive risk-adjusted performance.
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CACI 12-Month Price Forecast
The AI assessment is bullish on CACI, driven by its consistent revenue growth, improving profitability, and defensive characteristics. The stock's valuation is reasonable given its growth prospects, and analyst sentiment is positive. However, the high debt levels and customer concentration warrant caution. The stance would be upgraded if revenue growth accelerates above 10% or if the stock pulls back to a more attractive valuation, while a downgrade would be triggered by a significant slowdown in government spending or a major contract loss.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CACI's 12-month outlook, with a consensus price target around $724.50 and implied upside of +16.3% versus the current price.
Average Target
$724.50
0 analysts
Implied Upside
+16.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$550 - $892
Analyst target range
CACI is covered by 14 analysts, with a consensus recommendation of 'Buy' (mean rating of 1.56 on a scale where 1 is Strong Buy and 5 is Sell). The average target price is $724.50, implying a potential upside of +15.3% from the current price of $628.20. The distribution of ratings includes 10 Buy/Overweight, 3 Hold/Neutral, and 1 Sell, reflecting a generally bullish sentiment. Recent institutional actions have been stable, with TD Cowen reiterating a Buy in July 2026 and JP Morgan maintaining an Overweight, while Citigroup and Jefferies have held Neutral/Hold stances, indicating a balanced but optimistic outlook.
Bulls vs Bears: CACI Investment Factors
CACI presents a compelling bull case driven by strong revenue growth, improving margins, and a defensive profile, supported by a bullish analyst consensus. However, the stock's elevated valuation, high debt, and customer concentration introduce significant risks. Currently, the bull case appears stronger, given the company's consistent execution and favorable government spending environment, but the high PEG ratio and potential for budget volatility warrant caution. The most critical tension is whether CACI can sustain its growth trajectory to justify its premium valuation, or if a slowdown in federal spending or margin compression will lead to multiple contraction.
Bullish
- Strong Revenue Growth: CACI's Q3 FY2026 revenue grew 8.49% YoY to $2.351B, with consistent mid-single-digit to low-double-digit growth over recent quarters. This steady expansion is driven by robust demand for defense and intelligence solutions, supported by favorable federal budget trends.
- Positive Analyst Sentiment: With a consensus rating of 'Buy' (mean 1.56) and an average target price of $724.50, analysts see a 15.3% upside from the current price of $628.20. Ten of 14 analysts rate it Buy/Overweight, reflecting strong institutional confidence.
- Improving Profitability: Operating margin improved to 9.7% in Q3 FY2026 from 9.1% in the year-ago quarter, while net margin rose to 5.5% from 5.2%. This margin expansion, coupled with revenue growth, is driving earnings growth ahead of revenue.
- Defensive Characteristics: With a beta of 0.541, CACI is significantly less volatile than the broader market, making it an attractive defensive holding. Its 1-year return of +30.95% also outperformed the S&P 500's +18.56%, demonstrating strong risk-adjusted performance.
Bearish
- Elevated Valuation: The trailing PE of 19.08x and forward PE of 16.67x are above the broader market average, and the PEG ratio of 2.37x suggests the stock is trading at a premium to its expected growth rate. This leaves limited margin of safety if growth disappoints.
- High Debt Levels: CACI's debt-to-equity ratio of 1.21 indicates significant leverage, which increases financial risk. Interest expenses of $52.3M in Q3 FY2026 represent a meaningful drag on earnings, and rising rates could further pressure profitability.
- Customer Concentration: The vast majority of revenue comes from U.S. government agencies, creating concentration risk. Any significant budget cuts or shifts in government spending priorities could directly impact CACI's revenue stream.
- Recent Price Volatility: Despite a strong rebound, CACI experienced a -33.44% max drawdown over the past year, with the stock falling from $683.50 to $434.70. This volatility highlights the potential for sharp declines, especially given the stock's recent rapid appreciation.
CACI Technical Analysis
CACI's stock has demonstrated a strong long-term uptrend, with a 1-year price change of +30.95%, significantly outperforming the S&P 500's +18.56% over the same period. The current price of $628.20 sits at approximately 91.9% of its 52-week range (between $434.70 low and $683.50 high), indicating the stock is trading near its highs, which typically signals robust momentum but also potential overextension. The stock's beta of 0.541 suggests it is less volatile than the broader market, providing a defensive characteristic that may appeal to risk-averse investors.
Beta
0.54
0.54x market volatility
Max Drawdown
-33.4%
Largest decline past year
52-Week Range
$435-$684
Price range past year
Annual Return
+29.9%
Cumulative gain past year
| Period | CACI Return | S&P 500 |
|---|---|---|
| 1m | +25.2% | +2.7% |
| 3m | +18.7% | +1.0% |
| 6m | -0.2% | +12.0% |
| 1y | +29.9% | +18.9% |
| ytd | +15.9% | +12.5% |
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CACI Fundamental Analysis
CACI's revenue trajectory remains solid, with the most recent quarter (Q3 FY2026, ended March 31, 2026) reporting revenue of $2.351 billion, up 8.49% year-over-year. This growth is consistent with the prior quarters: Q2 FY2026 revenue was $2.220 billion, Q1 FY2026 was $2.288 billion, and Q4 FY2025 was $2.304 billion, indicating a steady, mid-single-digit to low-double-digit growth pattern. The company's revenue is driven by its two segments: Technology Service ($1.327 billion) and Service, Other ($1.024 billion), with the technology services segment being the primary growth engine. This consistent growth reflects strong demand for CACI's defense and intelligence solutions, supported by a favorable federal budget environment.
Quarterly Revenue
$2.4B
2026-03
Revenue YoY Growth
+8.5%
YoY Comparison
Gross Margin
31.4%
Latest Quarter
Free Cash Flow
$625689000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CACI Overvalued?
Given CACI's positive net income, the PE ratio is the most appropriate valuation metric. The trailing PE is 19.08x, while the forward PE is 16.67x, implying that the market expects earnings growth of approximately 14.5% over the next year. This forward discount suggests analysts anticipate continued earnings expansion, which is supported by the company's consistent revenue growth and margin improvements. The PEG ratio of 2.37x indicates that the stock is trading at a premium to its expected growth rate, which may warrant caution for value-oriented investors.
PE
19.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 17x~24x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financially, CACI carries a debt-to-equity ratio of 1.21, indicating substantial leverage that increases vulnerability to interest rate hikes and economic downturns. Interest expenses of $52.3M in Q3 FY2026 represent a significant fixed cost, and while the company generates strong free cash flow ($625.7M TTM), a portion is consumed by debt servicing. Revenue concentration is another key risk, as the vast majority of revenue comes from U.S. government contracts, making the company highly sensitive to federal budget decisions. Any sequestration or defense spending cuts could directly impact revenue growth, as evidenced by the 8.49% YoY growth in Q3, which could decelerate if budgets tighten.
FAQ
The key risks include: 1) Financial risk from high debt (D/E 1.21) and interest expenses, which could strain earnings if rates rise. 2) Customer concentration risk, as the U.S. government is the primary client, making revenue vulnerable to budget cuts. 3) Valuation risk, as the stock trades at a premium (PEG 2.37) and could see multiple compression if growth slows. 4) Competitive risk from other defense contractors vying for the same contracts. The most severe risk is a significant reduction in federal defense spending, which could lead to revenue declines and a sharp stock price drop.
The 12-month forecast is positive, with a base case target of $724.50 (analyst average) and a bull case target of $892 (analyst high), implying upside of 15.3% and 42.0%, respectively. The bear case target is $550 (analyst low), representing a -12.4% downside. The base case has a 50% probability, assuming continued revenue growth of around 8% and stable margins. The bull case (30% probability) would require accelerated growth and margin expansion, while the bear case (20% probability) would be triggered by budget cuts or contract losses. Overall, the most likely scenario is moderate upside, with the stock trading in the $628-$724 range.
CACI is trading at a trailing PE of 19.08x and a forward PE of 16.67x, which is slightly above the market average but reasonable for a company with expected earnings growth of ~14.5%. The PEG ratio of 2.37x suggests it is overvalued relative to its growth rate, indicating the market is pricing in continued strong performance. Compared to its own history, the stock is near the higher end of its valuation range, reflecting optimism about future growth. Overall, CACI is fairly valued to slightly overvalued, with the premium justified by its consistent execution and defensive characteristics.
CACI is a good buy for investors with a moderate risk tolerance and a long-term horizon. The stock offers a 15.3% upside to the average analyst target of $724.50, supported by strong revenue growth of 8.49% YoY and a defensive beta of 0.541. However, the elevated valuation (PEG 2.37) and high debt levels (D/E 1.21) introduce risks. It is particularly suitable for those seeking exposure to defense and government IT spending, but investors should monitor federal budget developments and contract wins closely.
CACI is better suited for long-term investment due to its defensive characteristics (beta 0.541), consistent revenue growth, and exposure to secular trends in defense and government IT. The stock's low volatility and strong free cash flow make it a stable holding for a 3-5 year horizon. Short-term trading is possible given the recent volatility, but the stock's fundamental strength is best captured over the long term. Investors should be prepared for periodic drawdowns, as evidenced by the -33.44% max drawdown over the past year, but the long-term growth trajectory remains intact.