A Fresh Look at CACI International (CACI) Valuation as Investor Attention Builds

Sometimes a stock move is enough to make you pause and wonder if something is brewing beneath the surface. That is exactly what is happening with CACI International (CACI) right now. While there has not been a headline-grabbing event pushing shares higher or lower, pockets of investor attention are circulating around the company. This hints that a closer examination might reveal whether the risk-reward balance has shifted. It is a classic moment where savvy investors may want to reassess if CACI is offering value that the market is not fully appreciating.

Looking at the bigger picture, CACI has been marked by consistency rather than drama. Over the past year, the stock has gained about 2%, which leaves it trailing behind many peers. However, the story changes over multiple years with a 74% return in three years and more than doubling in five years. Momentum began to build this year, with a 16.7% year-to-date move, although last month’s pullback shows that market sentiment is still uncertain. Recent financials indicate solid revenue and net income growth, adding another layer to the company’s fundamentals.

So, does CACI’s current price represent a hidden opportunity for investors, or has the market already accounted for all the growth ahead?

Most Popular Narrative: 11.5% Undervalued

According to the most widely tracked narrative for CACI International, the stock is considered undervalued, trading at a notable discount to its estimated fair value. Analysts see robust growth prospects that could re-rate the stock higher if forecasts prove accurate.

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. This supports sustained revenue growth and backlog expansion.

Curious about the secret sauce behind this valuation edge? One catalyst is driving bullish forecasts, and it hinges on an earnings and margin outlook that could reset CACI’s value equation for years to come. Want to know which financial milestones must be hit to unlock this potential upside? The model reveals the exact formulas behind the double-digit discount, but only for those ready to look beneath the surface.

Result: Fair Value of $542.15 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, CACI’s reliance on U.S. government budgets and rising competition could quickly shift investor sentiment if federal spending or contract wins were to weaken.

Find out about the key risks to this CACI International narrative.

Another View: SWS DCF Model Perspective

Taking a step back from analyst price targets, the SWS DCF model builds value from the ground up by weighing future cash flows against today's price. This method also points to undervaluation, but does a second lens reveal hidden limits or opportunity?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CACI International for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CACI International Narrative

If these conclusions do not fit your perspective, or you enjoy doing your own analysis, you can put together your own narrative in just a few minutes by using Do it your way.

A great starting point for your CACI International research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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