Shares of CACI International Inc. (CACI) have gained 13.6% over the past six months. The company provides expertise and technology to government enterprise and mission customers. CACI has recently been named a Fortune 500 company.
While the company’s revenue for the fourth quarter of Fiscal Year 2021 missed consensus marginally, it outperformed estimates on the bottom-line front. CACI is expecting an expansion in margins, strong cash flow and continuation of organic growth in Fiscal Year 2022.
Let’s take a look at the financial performance of the company and understand what has changed in its key risk factors that investors should know.
The President and CEO of CACI, John Mengucci, said, “Our fourth-quarter results capped another strong year for CACI. We again achieved our financial commitments, delivering organic revenue growth above our addressable market, margin expansion, and robust cash flow, as well as record backlog.
Our financial performance supported a flexible and opportunistic capital deployment strategy, enabling us to both invest ahead of need and execute a value-creating accelerated share repurchase.”
CACI’s fourth-quarter revenue increased 4.6% year-over-year to $1.56 billion but missed consensus by $2.1 million. During the quarter, CACI notched business awards totaling $3.6 billion, 40% of which represented new business. As of June 30, the total backlog stood at $24.2 billion.
A lower effective tax rate and lower share count due to the $500-million share buyback (announced in March 2021) helped earnings per share rise 56.1% over the previous year to $5.74, outperforming estimates by $0.18. (See CACI International stock chart on TipRanks)
For Fiscal Year 2022, CACI sees revenue landing between $6.2 billion and $6.4 billion. It expects adjusted diluted earnings per share to be in the range of $18 to $18.83.
On August 17, J.P. Morgan analyst Seth Seifman reiterated a Buy rating on the stock and increased the price target to $325 from $300.
Cowen & Co. Analyst Cai Rumohr also has a Buy rating on the stock with a price target of $283. Rumohr said, “Healthy Q4 bookings support guide for solid backloaded FY22 organic growth of ~4% despite 2% Afghan drawdown headwind, and tax refund bolstered FCF offers firepower for M&A or repo not in the guide…The stock represents solid value in an oversold group.”
The stock has a Strong Buy consensus rating based on 3 Buys and 1 Hold. The average CACI International price target of $302.50 implies 17.4% upside potential.
Now, let’s look at what has changed in the company’s key risk factors.
According to the new Tipranks’ Risk Factors tool, CACI International’s main risk category is Legal & Regulatory, which accounts for 22% of the total 36 risks identified. Since June, the company has changed two key risk factors related to potential acquisitions under the Finance & Corporate category.
CACI acknowledges that it may face difficulty in integrating the operations of any company it acquires, which could lead to actual results deviating materially and adversely from the anticipated outcome.
The company further notes that it may have difficulty in identifying and executing acquisitions on favorable terms, which may lead to a slower growth rate than its historic track record.
The Finance & Corporate risk factor’s sector average is at 39%, compared to CACI’s 19%.
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