On Monday, UBS began coverage on shares of CACI International, listed on the New York Stock Exchange (NYSE:CACI) stock, with a Buy rating and a price target of $557.00.
Currently trading at $459.88 with a market capitalization of $10.3 billion, CACI's lower exposure to Federal Civilian spending and its focus on technology are key factors that bolster confidence in the company's revenue and margins. According to InvestingPro analysis, the stock appears to be slightly undervalued based on its Fair Value assessment.
CACI International, known for its information technology and professional services to the federal government, has a business model that includes strategic acquisitions contributing to its financial growth.
UBS noted CACI's "bolt-on M&A model" as a significant factor in its consistent free cash flow (FCF) per share growth, projecting an 18% compound annual growth rate (CAGR) over the next five years.
Despite current market uncertainties, UBS expressed optimism about CACI's financial outlook. The firm's analysis suggests that CACI's specific market positioning and strategic operations provide a solid foundation for continued growth and stability.
This view is supported by InvestingPro data showing strong liquidity with a current ratio of 1.75 and moderate debt levels. InvestingPro subscribers can access 8 additional key insights about CACI's financial health and growth prospects.
UBS also addressed the concerns surrounding DOGE, acknowledging it as a near-term headline risk. However, the firm views the recent sell-off in DOGE as a longer-term opportunity for investors. This perspective is based on the belief that CACI's core business strengths and growth strategies will outweigh the short-term market fluctuations.
The endorsement from UBS comes as a positive note for CACI International, as the company continues to navigate the complexities of government contracting and the evolving demands of technology services.
With analyst targets ranging from $540 to $650 and a consensus recommendation leaning towards Buy, investors will be watching CACI's performance closely.
For deeper insights, investors can access CACI's comprehensive Pro Research Report, available exclusively on InvestingPro, which includes detailed analysis of the company's financial health, growth prospects, and market positioning.
In other recent news, CACI International has been the subject of several significant developments. Earnings and revenue results show an 11% increase in Q1 revenue for fiscal year 2025, reaching nearly $2.1 billion. This led CACI to raise its revenue guidance for FY 2025 to between $8.1 billion and $8.3 billion. Jefferies estimates that CACI's earnings per share (EPS) could land between $28.00 and $28.50 by Fiscal Year 2027.
In terms of mergers, CACI recently completed the acquisition of Azure Summit Technology, LLC for a total cash consideration of $1.275 billion. The company also secured a $750 million Term Loan B Facility, which was instrumental in partially funding this acquisition.
On the analyst front, Barclays (LON:BARC) increased its price target for CACI to $625 due to the company's promising three-year forecast. Jefferies and TD Cowen also raised their price targets to $570, citing strong Q1 performance and significant awards.
In other company news, CACI has been awarded a five-year task order from the U.S. Southern Command Operations, valued at up to $226 million. These recent developments underscore CACI International's strategic efforts to enhance its financial standing and operational efficiency.
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