On Friday, TD Cowen showed a positive outlook on CACI International Inc. (NYSE: CACI) shares as the firm raised the price target on the company's stock to $570.00, up from the previous target of $545.00. The Buy rating previously assigned to the stock remains unchanged.
The stock price target increase follows CACI International's robust performance in the first quarter, which outpaced organic growth expectations. The company's achievement was highlighted by a leading 1.7 times last twelve months (LTM) book-to-bill ratio, which is a measure of order backlog and an indicator of future revenue.
TD Cowen's analyst pointed to CACI's upwardly revised guidance for fiscal year 2025 as a key factor underpinning the raised price target. 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 viewed favorably by the analyst. Expected to be completed later this month, the acquisition is considered to be both accretive to earnings and synergistic with CACI's existing operations. The analyst's confidence in the strategic fit of the acquisition is reflected in the adjusted price target.
TD Cowen based the new stock price target on a 15 times calendar year 2025 total enterprise value/earnings before interest, taxes, depreciation, and amortization (TEV/EBITDA) estimate. This valuation method assesses a company's overall financial worth compared to its earnings potential, excluding non-cash and financing-related expenses.
InvestingPro Insights
CACI International's strong performance and positive outlook, as highlighted by TD Cowen, are further supported by recent data from InvestingPro. The company's market capitalization stands at $12.32 billion, reflecting its substantial presence in the industry. CACI's revenue growth of 13.24% over the last twelve months aligns with the analyst's observations of robust organic growth.
InvestingPro Tips indicate that CACI has been a strong performer, with a high return over the last year and a strong return over the last three months. This is consistent with the company's impressive book-to-bill ratio mentioned in the article. Moreover, the tip suggesting that CACI operates with a moderate level of debt could be seen as a positive factor in its ability to pursue strategic acquisitions like Azure Summit.
It is worth noting that CACI's P/E ratio of 25.96 is relatively high compared to its near-term earnings growth, which investors should consider alongside the positive outlook. For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into CACI's financial health and market position.
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