On Friday, Baird raised its stock price target for shares of CACI International (NYSE:CACI) to $544 from $464, while maintaining an Outperform rating on the stock. The firm's optimism is rooted in the company's multi-year backlog, which provides visibility into its revenue stream. CACI's backlog currently stands at $32 billion, indicating robust long-term organic growth potential.
The company is expected to benefit from increased international demand for its counter-unmanned aircraft systems (C-UAS), signals intelligence (SIGINT), and electronic warfare (EW) capabilities. Baird highlighted CACI's best-in-class execution and pioneering position in various technologies as key drivers for anticipated organic growth and margin expansion, which could extend beyond fiscal year 2025.
Moreover, CACI faces minimal recompete risk for its existing revenue base over the next 12 months. This stability, coupled with plans to submit bids worth $14 billion in the first half of fiscal year 2025, suggests a limited downside for the fiscal year 2025 outlook. The analyst's revised price target reflects a 5% free cash flow yield based on fiscal year 2026 estimates, underscoring the company's financial health and growth trajectory.
In other recent news, CACI International reported noteworthy financial accomplishments for the fourth quarter and fiscal year 2024. The company outperformed its revenue guidance with a 20% increase in Q4 and a 14% rise for the full year, while also securing a record $14 billion in contract awards. CACI's EBITDA reached nearly $800 million, and its free cash flow exceeded $380 million. The company's backlog rose to a robust $32 billion, marking a 22% year-over-year increase.
These are recent developments that also include projections for fiscal year 2025. CACI anticipates a 6% to 8.5% revenue growth and an 11% increase in free cash flow per share. The company's revenue is projected to be between $7.9 billion and $8.1 billion, with an expected adjusted net income between $505 million and $525 million.
CACI's future strategy includes aligning its incentive plans with shareholder value delivery, focusing on software capabilities to gain market share, and considering share repurchases and acquisitions for growth. The company's disciplined acquisition strategy prioritizes capabilities and customer relationships, and its commitment to operational excellence and talent acquisition underlines its competitive edge in the market.
InvestingPro Insights
As Baird shows confidence in CACI International's growth potential, current InvestingPro data aligns with this optimistic outlook. CACI's market cap of $10.27 billion and a P/E ratio of 24.26 suggest a substantial valuation, which is further supported by a strong revenue growth of 14.28% over the last twelve months as of Q4 2024. This revenue increase is indicative of the company's solid performance and potential for future expansion.
InvestingPro Tips highlight that CACI is trading near its 52-week high, reflecting investor confidence and the stock's strong momentum, which has seen a significant price uptick of 27.66% over the last six months. Moreover, CACI operates with a moderate level of debt, which provides a balanced financial structure to support its pioneering position in technology and defense. For readers interested in further analysis, there are 9 additional InvestingPro Tips available on CACI, offering deeper insights into the company's financial health and stock performance.
These metrics and tips underscore the company's robust financial foundation and the positive market sentiment, which align with Baird's raised price target and outlook for CACI International.
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