A month has gone by since the last earnings report for CACI International (CACI Quick QuoteCACI - Free Report) . Shares have lost about 1.1% in that time frame, underperforming the S&P 500.

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

CACI International Q1 Earnings Miss, Revenues Beat

CACI International reported mixed first-quarter fiscal 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.

The national security-related IT solutions and services provider reported non-GAAP earnings of $4.36 per share, missing the Zacks Consensus Estimate of $4.52. However, the bottom line remained flat on a year-over-year basis as the benefits from higher operating income, lower taxes and share repurchases were fully offset by increased interest expenses.

In the first quarter of fiscal 2024, CACI reported revenues of $1.85 billion, surpassing the Zacks Consensus Estimate of $1.69 billion. The top line also increased 15.2% from the prior-year quarter, primarily driven by organic growth, which was boosted by roughly $100 million of higher-than-expected material purchases by the company’s customers.

Quarterly Details

In the first quarter, contract awards totaled $3.1 billion, with approximately 50% for the new business. Revenues from contract awards excluded the ceiling value of multi-award, indefinite-delivery indefinite-quantity contracts.

CACI ended the quarter with a backlog of $26.7 billion, up 7% on a year-over-year basis. As of Sep 30, 2023, the funded backlog increased by 14% to $4.2 billion. Our estimates for the total backlog and the funded backlog were pegged at $26.5 billion and $3.6 billion, respectively.

In terms of the customer mix, the Department of Defense contributed 73.1% to total revenues in the reported quarter. Federal Civilian Agencies made up 22%, while Commercial and other customers accounted for 4.9% of revenues. Our estimates for the Department of Defense, Federal Civilian Agencies, and Commercial and Other customers’ contributions toward total revenues were pegged at 71.8%, 23% and 5.3%, respectively.

Revenues generated as a Prime Contractor and a Subcontractor accounted for 89.1% and 10.9% of the total revenues, respectively. Our model estimates suggested contributions from the Prime Contractor and the Subcontractor of 89.1% and 10.9%, respectively.

In terms of contract type, cost-plus-fee-type contracts, fixed-price contracts, and time and material-type contracts contributed 61.4%, 27.1% and 11.5%, respectively, to total revenues. Our model estimates suggested contributions from cost-plus-fee-type contracts, fixed-price contracts, and time and material-type contracts of 58.3%, 29.9% and 11.8%, respectively.

Revenues generated as Expertise and Technology accounted for 47.5% and 52.5% of the total revenues, respectively. Our estimates for Expertise and Technology contributions toward total revenues were pegged at 46.1% and 53.9%, respectively.

The operating income for the quarter amounted to $137.3 million, up 3.4% year over year. However, the operating margin contracted 90 basis points (bps) to 7.4%.

Adjusted EBITDA increased 2.5% year over year to $174.2 million. However, the adjusted EBITDA margin shrank by 120 bps to 9.4%.

Balance Sheet & Cash Flow

As of Sep 30, 2023, CACI had cash and cash equivalents of $125.5 million compared with the previous quarter’s $115.8 million. The total long-term (net of the current portion) debt was $1.74 billion, up from $1.65 billion as of Jun 30, 2023.

The company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) of $93.3 million in the first quarter, down 34.8% from the year-ago quarter. Free cash flow was $79.3 million during the quarter under review.

Updated Fiscal 2024 Guidance

CACI has raised its guidance for fiscal 2024. The company now projects revenues between $7.2 billion and $7.4 billion, up from the earlier guidance range of $7-$7.2 billion. It now forecasts adjusted earnings per share between $19.38 and $20.48 compared with the previous expectations of $19.13-$20.22.

It now forecasts to generate a free cash flow of $410 million during fiscal 2024, up from the earlier anticipation of $400 million. However, CACI still expects fiscal 2024 adjusted net income in the range of $440-$465 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -6.63% due to these changes.

VGM Scores

At this time, CACI International has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

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