Last Update 07 Dec 25

CACI: Future Outlook Will Be Shaped By Backlog Strength And Funding Risks

Analysts have raised their price target on CACI International to $670 from $600, citing an exceptionally strong recent quarter, a growing funded backlog, and reduced risk to the company’s longer term outlook despite ongoing U.S. government funding uncertainties.

Analyst Commentary

Bullish analysts view the latest quarter as a notable upside surprise, arguing that the company demonstrated its ability to outperform modest expectations while navigating a complex federal spending environment.

They emphasize that the higher price target reflects growing confidence in the company’s execution against its long term strategy and the durability of its earnings growth profile.

Bullish Takeaways

Recent results are seen as significantly ahead of previously modest expectations, reinforcing the view that management can consistently execute and beat near term forecasts.
The uptick in funded backlog is interpreted as a strong indicator of future revenue visibility and multi year growth, supporting a premium valuation multiple relative to peers.
Despite ongoing U.S. government funding uncertainty, the strong start to the fiscal year is viewed as de risking the company’s FY26 outlook and smoothing prospective earnings volatility.
Bullish analysts continue to frame the company as a top idea in the government services space, citing its positioning on high priority federal programs as a driver of sustained contract wins.

Bearish Takeaways

Bearish analysts caution that the stock’s valuation, following the price target increase, leaves less room for error if growth normalizes or if contract timing becomes less favorable.
Persistent uncertainty around the federal budget process and the risk of extended funding disruptions are seen as potential headwinds to near term revenue conversion from backlog.
There is concern that the exceptionally strong quarter could set a high bar for future comparisons, raising the risk of investor disappointment if subsequent results revert closer to trend.
Some skeptics highlight that, while backlog growth is encouraging, execution risk remains around staffing, cost control, and on time delivery for complex government programs.

What's in the News

Stifel raised its price target on CACI International to $670 from $600 and reiterated a Buy rating, highlighting an unusually strong quarter and improved confidence in the FY26 outlook despite ongoing U.S. government shutdown risk (Stifel research note).
CACI won a five year task order worth up to $180 million to modernize and operate Pacific theater network operations for Pacific Air Forces, strengthening Indo Pacific Command mission readiness and cyber defense (client announcement).
The company secured a five year, up to $145 million task order to provide engineering and planning support at the U.S. Navy Portsmouth Naval Shipyard, covering modernization, maintenance, and repair for submarines and other undersea platforms (client announcement).
CACI was awarded a three year task order valued at up to $79 million to support the U.S. Army DEVCOM C5ISR Center with systems engineering, electronic warfare, and RF spectrum work to enhance warfighter survivability and lethality (client announcement).
The company confirmed its fiscal 2026 revenue guidance of $9.2 billion to $9.4 billion, maintaining its prior outlook despite budget and funding uncertainties (corporate guidance).

Valuation Changes

The fair value estimate remains effectively unchanged at approximately $659, suggesting no material shift in the intrinsic valuation outlook.
The discount rate has fallen slightly from about 7.60 percent to 7.58 percent, indicating a marginally lower assumed cost of capital.
The revenue growth assumption is effectively unchanged, holding at roughly 6.50 percent over the forecast horizon.
The net profit margin estimate remains stable at about 6.17 percent, reflecting no meaningful change in expected profitability.
The future P/E multiple has edged down slightly from about 26.12x to 26.10x, implying a marginally lower valuation multiple applied to forward earnings.

Expanding government funding and rapid tech adoption are increasing CACI's market opportunities, revenue growth, and contract quality in national security and defense.
Strategic acquisitions and sustained digital transformation initiatives strengthen CACI's competitive positioning, margin expansion, and long-term contract visibility.
Heavy dependence on U.S. government contracts, rising competition, operational challenges, and workforce pressures create risks for growth, margins, and earnings stability.

Catalysts

About CACI International

Through its subsidiaries, provides expertise and technology solutions in the United States, the United Kingdom, rest of Europe, and internationally.What are the underlying business or industry changes driving this perspective?

Robust and growing government funding in national security, border protection, and defense technology-particularly from recent legislative acts (like the $150B+ for defense and $170B for border security)-is providing a favorable backdrop and increasing CACI's addressable market, supporting sustained revenue growth and backlog expansion.
Accelerated adoption of advanced technologies, such as software-defined platforms, cyber solutions, and enterprise software modernization, is driving a shift in federal procurement toward higher-value, tech-enabled contracts where CACI's existing leadership, strong track record, and investments ahead of customer need enable higher win rates, contract stickiness, and margin expansion.
The ongoing consolidation of government legacy systems and rising demand for digital transformation (as exemplified by CACI's role in Army system consolidation and NASA NCAPS implementation) position the company to capture more long-term, mission-critical contracts, enhancing both revenue visibility and net margins.
CACI's strategic acquisition activity focuses on high-margin, technology-driven niches like cyber, electronic warfare, and AI, steadily improving its revenue mix, differentiating its offerings, and delivering incremental expansion in EBITDA and earnings over time.
Structural trends including rising regulatory complexity, talent scarcity in cleared roles, and increasing government shift toward outcome-based contracting and longer-term relationships, reinforce CACI's competitive moat, supporting pricing power and improved free cash flow conversion.

CACI International Earnings and Revenue Growth

CACI International Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming CACI International's revenue will grow by 6.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.8% today to 6.1% in 3 years time.
Analysts expect earnings to reach $634.1 million (and earnings per share of $30.96) by about September 2028, up from $499.8 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.1x on those 2028 earnings, up from 21.1x today. This future PE is lower than the current PE for the US Professional Services industry at 26.3x.
Analysts expect the number of shares outstanding to decline by 1.85% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.57%, as per the Simply Wall St company report.

CACI International Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

CACI's heavy reliance on U.S. government defense and intelligence budgets (90%+ of revenue) exposes the company to budget volatility, government shutdowns, and political gridlock-any prolonged reduction or delay in federal spending could lead to significant revenue and earnings instability.
While CACI emphasizes its differentiation and selective bidding, the text points to industry-wide competition for high-value contracts and "takeaway work"-heightened competition from larger or aggressively priced peers could compress margins and reduce win rates, impacting both revenue growth and net margins.
The company acknowledges recent supply chain and manufacturing issues that slowed production in its space/optical terminal business; persistent execution risks or inability to ramp production could limit top-line growth in emerging areas, especially as volume-based defense tech offerings become more important to margins and revenue.
Contracting officer workforce reductions and increasing focus on contract and systems consolidation in government procurement may delay contract awards and introduce uncertainty in business development cycles, potentially slowing backlog conversion, impacting quarterly revenue timing, and leading to lumpier or unpredictable earnings and free cash flow.
Talent shortages and rising wage costs in the cleared workforce, especially for cyber, analytics, and AI, could drive up costs and turnover rates, leading to operational pressures, lower utilization rates, and reduced profitability over time-this industry-wide trend could hamper CACI's ability to maintain margin expansion and stable earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $563.583 for CACI International based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $10.4 billion, earnings will come to $634.1 million, and it would be trading on a PE ratio of 22.1x, assuming you use a discount rate of 7.6%.
Given the current share price of $479.62, the analyst price target of $563.58 is 14.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Government Funding And Technology Investments Will Drive Stronger Long-Term Performance