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5 Reasons Why CACI Stock is a Solid Buy Now for Investors
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With the boom in technological advancements, demand for computers has expanded drastically. Over 65 million units of computers were shipped in 2015 compared with just 2,000 units in 1960. This rise has led to a rapid increase in the demand for computer services as well.
Based in Arlington, VA, CACI International Inc (CACI - Free Report) delivers IT applications and infrastructure to improve communications and secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. The company’s solutions enhance defense and intelligence capabilities, assure homeland security, improve decision-making, and help customers operate smartly and efficiently.
Sales/Assets Ratio
The sales/asset ratio is often overlooked by investors, but it can be an important indicator in growth investing nonetheless. This metric — also known as S/TA — shows us how much sales are generated from the company’s assets, indicating whether a firm is using its assets effectively.
Currently, the company has a S/TA ratio of 1.08 which means that it gets $1.08 in sales for each dollar in assets. Comparing this to the industry average ratio of 0.99 we can say that CACI is a bit more efficient than the industry at large. The company currently projects sales growth this year of 13.38%, ahead of the industry average of 3.83%.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Right now, CACI has a P/S ratio of about 0.73. This is a bit lower than the industry average, which is at 1.55 right now.
Earnings Estimate Revisions
In addition to the favorable metrics outlined above, investors should also consider the positive trends that we are seeing on the analyst estimate revision front. Analysts have been raising their estimates for CACI lately, and now the earnings picture is looking favorable for the company.
The company outperformed the Zacks categorized Computer - Services industry with an average return of 4.1% compared with 3.7% gain for the latter, over the last month. Over the same period, consensus estimate for the full year has jumped from $6.26 to $6.37 per share today.
Strong Financial Performance in Fourth Quarter
CACI ended fiscal 2016 with a bang as it reported strong fourth-quarter results with healthy year-over-year increase in both earnings and revenues. GAAP earnings for the reported quarter were $43.6 million or $1.75 per share compared with $41.4 million or $1.68 per share in the prior-year quarter. The year-over-year increase in earnings was primarily driven by a significant improvement in revenues.
Quarterly revenues were up 28.7% year over year to $1,113.9 million largely due to the accretive acquisition of National Security Solutions (NSS). The reported revenues exceeded the Zacks Consensus Estimate of $1,099 million. Fiscal 2016 revenues increased to $3.7 billion from $3.3 billion in fiscal 2015 owing to positive contribution from the NSS acquisition.
Owing to its strong financial performance in the fourth quarter, CACI expects fiscal 2017 revenues in the range of $4,050–$4,250 million. Net income is expected in the range of $150 million to $160 million, resulting in earnings per share in the range of $6.02–$6.43.
Strategic Divestitures
CACI has a large pipeline of new projects and continues to win more deals at regular intervals. These back-to-back contract wins are the key catalysts driving success perennially for the company. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenues. Although the government generally has a lengthy approval process, the project earns money for a number of years after it is approved. Moreover, government contracts also improve the visibility of future revenue streams. The company has been doing very well with a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction. Going forward, the company continues to execute its strategy of winning high-value contracts, delivering excellence to its customers and deploying its capital for growth. The company’s robust business model is expected to help it grow and achieve newer heights.
Bottom Line
In aggregate, CACI currently has a Zacks VGM Score of ‘A’. This, along with some other key metrics makes the company a solid choice for investors.
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 14.3x.
Barloworld has a long-term earnings growth expectation of 18.70% and is currently trading at a forward P/E of 13.54x.
CGI Group has a long-term earnings growth expectation of 8% and is currently trading at a forward P/E of 16.97x.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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5 Reasons Why CACI Stock is a Solid Buy Now for Investors
With the boom in technological advancements, demand for computers has expanded drastically. Over 65 million units of computers were shipped in 2015 compared with just 2,000 units in 1960. This rise has led to a rapid increase in the demand for computer services as well.
Based in Arlington, VA, CACI International Inc (CACI - Free Report) delivers IT applications and infrastructure to improve communications and secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. The company’s solutions enhance defense and intelligence capabilities, assure homeland security, improve decision-making, and help customers operate smartly and efficiently.
Sales/Assets Ratio
The sales/asset ratio is often overlooked by investors, but it can be an important indicator in growth investing nonetheless. This metric — also known as S/TA — shows us how much sales are generated from the company’s assets, indicating whether a firm is using its assets effectively.
Currently, the company has a S/TA ratio of 1.08 which means that it gets $1.08 in sales for each dollar in assets. Comparing this to the industry average ratio of 0.99 we can say that CACI is a bit more efficient than the industry at large. The company currently projects sales growth this year of 13.38%, ahead of the industry average of 3.83%.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Right now, CACI has a P/S ratio of about 0.73. This is a bit lower than the industry average, which is at 1.55 right now.
Earnings Estimate Revisions
In addition to the favorable metrics outlined above, investors should also consider the positive trends that we are seeing on the analyst estimate revision front. Analysts have been raising their estimates for CACI lately, and now the earnings picture is looking favorable for the company.
The company outperformed the Zacks categorized Computer - Services industry with an average return of 4.1% compared with 3.7% gain for the latter, over the last month. Over the same period, consensus estimate for the full year has jumped from $6.26 to $6.37 per share today.
Strong Financial Performance in Fourth Quarter
CACI ended fiscal 2016 with a bang as it reported strong fourth-quarter results with healthy year-over-year increase in both earnings and revenues. GAAP earnings for the reported quarter were $43.6 million or $1.75 per share compared with $41.4 million or $1.68 per share in the prior-year quarter. The year-over-year increase in earnings was primarily driven by a significant improvement in revenues.
Quarterly revenues were up 28.7% year over year to $1,113.9 million largely due to the accretive acquisition of National Security Solutions (NSS). The reported revenues exceeded the Zacks Consensus Estimate of $1,099 million. Fiscal 2016 revenues increased to $3.7 billion from $3.3 billion in fiscal 2015 owing to positive contribution from the NSS acquisition.
Owing to its strong financial performance in the fourth quarter, CACI expects fiscal 2017 revenues in the range of $4,050–$4,250 million. Net income is expected in the range of $150 million to $160 million, resulting in earnings per share in the range of $6.02–$6.43.
Strategic Divestitures
CACI has a large pipeline of new projects and continues to win more deals at regular intervals. These back-to-back contract wins are the key catalysts driving success perennially for the company. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenues. Although the government generally has a lengthy approval process, the project earns money for a number of years after it is approved. Moreover, government contracts also improve the visibility of future revenue streams. The company has been doing very well with a record level of awards, which reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction. Going forward, the company continues to execute its strategy of winning high-value contracts, delivering excellence to its customers and deploying its capital for growth. The company’s robust business model is expected to help it grow and achieve newer heights.
Bottom Line
In aggregate, CACI currently has a Zacks VGM Score of ‘A’. This, along with some other key metrics makes the company a solid choice for investors.
CACI currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other favorably ranked stocks include Hitachi, Ltd. (HTHIY - Free Report) , CGI Group Inc. (GIB - Free Report) and Barloworld Ltd. (BRRAY - Free Report) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 14.3x.
Barloworld has a long-term earnings growth expectation of 18.70% and is currently trading at a forward P/E of 13.54x.
CGI Group has a long-term earnings growth expectation of 8% and is currently trading at a forward P/E of 16.97x.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>