Last Update 05 Feb 26

Fair value Increased 6.16%

CACI: Future Contract Wins Will Support Higher Earnings Power

CACI International's updated analyst price target has moved higher to about $718, supported by analysts citing stronger assumptions around revenue growth, profit margins, and a slightly lower discount rate, along with recent price target increases from several major research firms.

Analyst Commentary

Recent Street research around CACI International has centered on a series of price target revisions, with several bullish analysts lifting their targets and one bearish analyst trimming theirs. Together, these moves give you a sense of how the market is weighing CACI's execution risks against its perceived growth runway and valuation.

Bullish Takeaways

Multiple recent price target increases, including sizeable upward moves and a higher target from JPMorgan, signal that bullish analysts are revisiting their models with more constructive assumptions on revenue and margin durability.
The cluster of higher targets within a short time frame suggests growing confidence around CACI's ability to execute on its current contract portfolio and pipeline, which feeds directly into higher earnings power in these models.
Higher targets from several firms at once point to a view that the prior valuation framework may have been too conservative, with analysts now assigning more value to CACI's future cash flow potential in their discounted cash flow and relative multiple work.
For investors, the spread of upward revisions provides a reference range for where more optimistic analysts think the risk reward skews, especially when compared with the current share price and CACI's historical trading multiples.

Bearish Takeaways

The recent US$7 target reduction from a bearish analyst signals that not everyone is aligned with the more optimistic assumptions, highlighting continued debate about how much growth and margin resilience to underwrite.
This lower target underscores concerns that execution risks, contract timing, or cost pressures could limit upside relative to the more bullish scenarios embedded in higher targets.
The mix of rising and trimmed targets points to uncertainty around what should be considered a reasonable valuation range, reminding you that small changes in growth or discount rate inputs can meaningfully shift price targets.
For investors, the presence of at least one reduced target serves as a check on optimism, encouraging closer attention to CACI's upcoming execution milestones and how they might influence future revisions, either higher or lower.

What's in the News

CACI International won a five-year task order valued at up to US$250 million to support spectrum dominance for the U.S. Army Capability Program Executive, Intelligence, Electronic Warfare & Sensors. The work focuses on integration and sustainment for multi domain EW and spectrum dominance capabilities (Key Developments).
The company raised fiscal 2026 guidance, now expecting revenues between US$9.3b and US$9.5b, net income between US$524 million and US$539 million, and diluted EPS between US$23.50 and US$24.17 (Key Developments).
CACI secured a five-year, single award task order valued at up to US$416 million for the U.S. Navy's NAVSEA Navy Maritime Maintenance Enterprise Solution program. The contract supports modernization of IT infrastructure and applications with a cloud first enterprise approach (Key Developments).
The company was awarded a five-year task order valued at up to US$212 million to deliver software defined enterprise level network modernization across 14 U.S. Space Force installations under the USAF Base Infrastructure Modernization contract vehicle (Key Developments).
CACI received additional task orders, including up to US$145 million over five years to support the U.S. Navy Portsmouth Naval Shipyard Engineering and Planning Department, and up to US$79 million over three years to support the U.S. Army DEVCOM C5ISR Center with systems engineering and RF spectrum focused support (Key Developments).

Valuation Changes

Fair Value: increased from about US$676.42 to about US$718.08, representing a moderate upward shift in the modelled target level.
Discount Rate: moved slightly lower from about 7.60% to about 7.57%, reflecting a slightly lower required return in the updated assumptions.
Revenue Growth: rose from about 6.68% to about 7.96%, indicating a modestly stronger growth profile in the new model inputs.
Profit Margin: increased from about 6.21% to about 6.39%, representing a small uplift in expected profitability.
Future P/E: declined slightly from about 26.50x to about 26.00x, implying a modestly lower valuation multiple applied to future earnings.

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Key Takeaways

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