On Monday, TD Cowen maintained a positive outlook on CACI International shares, reiterating a Buy rating and a price target of $480.00. The firm highlighted the potential benefits from CACI International's proposed acquisition of Azure Summit, emphasizing the synergies expected in customer and product revenue.
The acquisition is seen as a strategic move to enhance CACI's software capabilities, particularly in the rapidly expanding markets for counter unmanned aircraft systems (UAS) and electronic warfare (EW) applications.
TD Cowen views the deal as being reasonably priced, noting that it is valued at approximately 10 times the next twelve months' (NTM) adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). The firm anticipates that the acquisition will be immediately accretive, contributing to CACI's financial performance from the outset.
CACI International, listed on the New York Stock Exchange under the ticker NYSE:CACI, is set to expand its technological offerings through this acquisition. Azure Summit brings to the table software-defined radios that are expected to complement CACI's existing software solutions, thereby strengthening its position in the defense technology sector.
The deal's pricing and the anticipated financial impact underscore TD Cowen's confidence in the strategic value of the acquisition for CACI International. The firm's reiteration of the Buy rating and the $480.00 price target reflects its expectation that CACI's stock will benefit from the integration of Azure Summit's technologies and capabilities.
In other recent news, CACI International has announced its intention to acquire Azure Summit Technology in a $1.275 billion all-cash transaction, expected to close in the second quarter of fiscal year 2025. This acquisition is set to enhance CACI's portfolio in intelligence, surveillance, and reconnaissance.
Additionally, CACI announced plans to acquire another undisclosed company, marking a strategic move in expanding its national security-related services.
On the financial front, CACI reported a 20% increase in Q4 revenue and a 14% rise for the full fiscal year, surpassing its own guidance. The company also secured a record $14 billion in contract awards, and its backlog rose to $32 billion, marking a 22% year-on-year increase.
Analysts from BofA Securities and Baird have expressed optimism about CACI's future. BofA Securities raised the stock's price target from $450.00 to $535 and maintained a Buy rating, while Baird increased its price target to $544.
CACI secured several significant contracts, including an $80 million task order to provide engineering support to the U.S. Navy's Naval Sea Systems Command, and a potential six-year, $239 million task order from the U.S. Army to provide intelligence analysis and operations support to U.S. forces in Europe and Africa.
For fiscal year 2025, CACI projects a revenue growth of 6% to 8.5%, with an expected 11% increase in free cash flow per share. The company's revenue is estimated to be between $7.9 billion and $8.1 billion, with adjusted net income projected between $505 million and $525 million.
Lastly, CACI has been recognized with two Nunn-Perry Awards for its mentorship excellence under the Department of Defense Mentor Protégé Program.
InvestingPro Insights
TD Cowen's endorsement of CACI International's stock and the potential upside from the Azure Summit acquisition is further illuminated by real-time data and insights from InvestingPro. With a market capitalization of $10.92 billion and a Price/Earnings (P/E) ratio standing at 26.18, CACI appears to be trading at a premium based on near-term earnings growth. This aligns with one of the InvestingPro Tips, which notes that CACI is trading at a high P/E ratio relative to its near-term earnings growth prospects.
Another InvestingPro Tip highlights CACI's low price volatility, which could be a reassuring factor for investors seeking stability in their investments. This is particularly relevant given CACI's significant revenue growth over the last twelve months, reported at 14.28%. Moreover, the company's stock has been trading near its 52-week high, at 98.61% of the peak price, and has experienced a substantial price uptick of 27.79% over the last six months. The combination of strong financial performance and steady stock behavior may offer a compelling narrative for investors considering CACI's shares.
For those interested in deeper analysis, there are additional InvestingPro Tips available, providing further insights into CACI's financial health and market performance. To explore these further, one can visit InvestingPro's dedicated page for CACI at https://www.investing.com/pro/CACI.
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