On Wednesday, Jefferies maintained its Hold rating on shares of CACI International (NYSE: CACI) but increased its price target from $490.00 to $570.00. The firm's analyst cited the company's strong start to fiscal year 2025, with significant awards and backlog from the previous quarter prompting a one-point increase in FY25 revenue projections.
The guidance suggests that organic growth will slow to about 5% in the second and third quarters, down from the first quarter's 10% growth rate. This is seen as a relatively low hurdle, but the expectation of an 80 basis point margin growth in the second half of the year is considered to add risk.
According to the analyst, the earnings per share (EPS) estimate for 2025 has been adjusted upward by $0.10 to $23.00. This change reflects an additional $21 million in earnings before interest and taxes (EBIT), which is somewhat offset by higher tax expenses. Adjusted free cash flow (FCF) projections for 2025 were also increased by $10 million, reaching an estimate of $459 million despite a $110 million working capital drag.
The new price target of $570.00 represents a 5.0% yield on the firm's FY2 free cash flow estimate, which is slightly below the 5.2% average yield of CACI's peers. This adjustment reflects the analyst's view of the company's financial outlook and performance potential.
In other recent news, CACI International Inc. has been making significant strides in its financial performance and strategic growth.
The company reported an 11% increase in Q1 FY 2025 revenue, reaching nearly $2.1 billion, and raised its revenue guidance for FY 2025 to between $8.1 billion and $8.3 billion. Adjusted earnings per share are projected to rise to between $22.89 and $23.78, reflecting the company's strong market performance.
In a recent development, TD Cowen, a financial analyst firm, held a positive outlook on CACI's shares, raising its price target from $545.00 to $570.00. This adjustment is attributed to CACI's robust Q1 performance and upwardly revised guidance for FY 2025. The firm's analysis suggests that CACI's financial projections are well-supported by its recent performance metrics.
Moreover, the proposed acquisition of Azure Summit is expected to be completed soon and is viewed favorably by TD Cowen. The acquisition is considered to be both accretive to earnings and synergistic with CACI's existing operations. These recent developments highlight CACI International's strategic efforts to enhance its financial standing and operational efficiency.
InvestingPro Insights
CACI International's recent performance aligns with the positive outlook presented in the Jefferies analysis. According to InvestingPro data, CACI's revenue growth stands at 13.24% for the last twelve months, with a quarterly growth of 11.17% in Q1 2025, supporting the strong start to the fiscal year mentioned in the article. The company's market capitalization of $12.62 billion and a P/E ratio of 27.52 reflect its solid market position.
InvestingPro Tips highlight that CACI is trading near its 52-week high, with a strong return of 77.45% over the last year. This performance supports the analyst's decision to raise the price target. Additionally, the tip indicating that 6 analysts have revised their earnings upwards for the upcoming period aligns with Jefferies' increased EPS estimate for 2025.
It's worth noting that CACI operates with a moderate level of debt and its liquid assets exceed short-term obligations, which could contribute to the positive free cash flow projections mentioned in the article. For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips for CACI International, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.