When CACI International Inc (NYSE:CACI) announced its most recent earnings (30 June 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well CACI International has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see CACI has performed.
How Did CACI’s Recent Performance Stack Up Against Its Past?
CACI’s trailing twelve-month earnings (from 30 June 2019) of US$266m has declined by -12% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 21%, indicating the rate at which CACI is growing has slowed down. What could be happening here? Let’s examine what’s transpiring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, CACI International has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 6.2% exceeds the US IT industry of 5.9%, indicating CACI International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for CACI International’s debt level, has increased over the past 3 years from 7.9% to 8.6%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 95% to 70% over the past 5 years.
What does this mean?
CACI International’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research CACI International to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CACI’s future growth? Take a look at our free research report of analyst consensus for CACI’s outlook.
- Financial Health: Are CACI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.
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