A month has gone by since the last earnings report for CACI International (CACI Quick QuoteCACI - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is CACI International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

CACI International Q4 Earnings Top, Sales Meet Estimates

CACI International reported fourth-quarter fiscal 2021 results, wherein earnings beat the consensus mark while revenues matched the same.

The company reported non-GAAP earnings of $6.26 per share beating the Zacks Consensus Estimate of $5.74 per share. The bottom line improved by 52.7% from the year-ago quarter’s earnings of $4.10 per share.

This upsurge in earnings was primarily driven by higher revenues, lower effective tax rate and reduced number of shares outstanding, partially offset by increased indirect expenses, impact of tax elections and normal fluctuations in revenue mix. Reduction in shares outstanding was due to the stock buyback worth $500 million under the accelerated share repurchase program announced in March this year.

In the fourth quarter of 2021, CACI International reported revenues of $1.56 billion, in line with the Zacks Consensus Estimate. The top line improved 4.6% from the year-earlier quarter’s reported figure. Organic revenue grew 4% on a year-over-year basis.

Quarterly Details

Contract awards during the fourth quarter totaled $3.6 billion, with approximately 40% for the new business to CACI International. Revenues from contract awards exclude ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.

CACI International ended the quarter with a backlog of $24.2 billion, up by 12% on a year-over-year basis. As of Jun 30, 2021, the funded backlog climbed 18% to $3.3 billion.

In terms of customer mix, the Department of Defense contributed 69.9% to total revenues in the reported quarter. Federal Civilian Agencies contributed 25.6%, while Commercial and other customers accounted for 4.5% of revenues.

Revenues generated as a prime contractor and a subcontractor accounted for 89.1% and 10.9% of total revenues, respectively.

In terms of contract type, cost-plus-fee type contracts, fixed-price contracts, and time and material type contracts contributed 59.6%, 28% and 12.4% to total revenues, respectively.

Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 47% and 53% of total revenues, respectively.

Operating Details

Operating income for the quarter totaled $112.1 million, down 16.2% year over year. Operating margin contracted 170 basis points to 7.2%. The company cited high indirect expenses, impact of tax elections taken under the CARES Act and normal fluctuations in revenue mix as the main reasons behind declines in operating income and margin.

Adjusted EBITDA fell 11.1% year over year to $144.9 million. Adjusted EBITDA margin of 9.3% declined 160 basis points (bps).

Balance Sheet & Cash Flow

As of Jun 30, 2021, CACI International had cash and cash equivalents of $88 million compared with the previous quarter’s $105.6 million. Total long-term (net of current portion) debt was $1.69 billion, down from $1.78 billion as of Mar 31, 2021.

The company generated an operating cash flow (excluding MARPA) of $99.5 million during the fourth quarter, indicating a slump of 36% from the year-ago quarter. The decline was due to higher cash tax payments due to the tax elections taken under the CARES Act. For full fiscal 2021, cash generated through operating activities (excluding MARPA) amounted to $610.2 million.

Free cash flow for the fourth quarter was $77.7 million, while the same for fiscal 2021 was $537.1 million.

Full-Year Highlights

CACI International reported revenues of $6.04 billion in full-year fiscal 2021, up 5.7% year over year.

Operating income for fiscal 2021 increased 17.9% year over year to $539.5 million. The operating margin expanded 90 bps to 8.9%. This upside was driven by strong contract execution, lower contract costs, and quicker growth in higher-margin technology revenues.

Adjusted earnings per share increased 41.6% year over year to $20.29.

Adjusted EBITDA increased 16.6% year over year to $668.6 million. Notably, CACI International’s contract awards for fiscal 2021 totaled $9.2 billion.

Fiscal 2022 Guidance

For fiscal 2022, CACI International projects revenues between $6.20 billion and $6.40 billion. Adjusted earnings are forecast to be $18-$18.83 per share.

CACI International expects a fiscal 2022 net income of $430-450 million. Additionally, free cash flow is estimated to be at least $720 million.

The company continues to anticipate solid organic revenue growth and continued margin expansion throughout 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 5.5% due to these changes.

VGM Scores

At this time, CACI International has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CACI International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.