Back to top

Image: Bigstock

Are Investors Undervaluing CACI International (CACI) Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is CACI International (CACI - Free Report) . CACI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 17.39, which compares to its industry's average of 19.24. Over the past 52 weeks, CACI's Forward P/E has been as high as 20.63 and as low as 13.45, with a median of 17.56.

CACI is also sporting a PEG ratio of 1.74. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CACI's PEG compares to its industry's average PEG of 1.86. CACI's PEG has been as high as 2.06 and as low as 1.34, with a median of 1.76, all within the past year.

Another valuation metric that we should highlight is CACI's P/B ratio of 2.16. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CACI's current P/B looks attractive when compared to its industry's average P/B of 3.48. Within the past 52 weeks, CACI's P/B has been as high as 2.33 and as low as 1.55, with a median of 2.03.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CACI has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.52.

These figures are just a handful of the metrics value investors tend to look at, but they help show that CACI International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CACI feels like a great value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


CACI International, Inc. (CACI) - free report >>

Published in