CACI International Inc (CACI): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/CACI

Headline

Field	Value
Ticker	CACI
Company	CACI International Inc
Sector / Industry	Technology
Current price	$491.31/sh
Composition	Cost-plus-fee 61% / Fixed-price 26% / Time-and-materials 13%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin (value-band context)	3.3%
Operating margin today	9.3%
Margin compression (value-band)	-6.0pp
Implied growth	-1.0%
Multiple paid	19x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.7pp (computed at the 7% minimum rate; the CAPM rate 6% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~15.1%/yr; the models below use their own rates.

How unusual the bet is: within-range

Reference	Value
vs own history	-1.01σ
cohort percentile (of 190 peers)	28
implied end-window share	0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	1.62x	5	expensive
Earnings	3.64x	4	expensive
Relative	0.52x	5	justifies
Growth	0.97x	2	justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.3%); the inversion above states its own rate.

Per-Model Detail (n=16)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	—	—	no	—
DCF Exit Multiple	Growth	$648.74	0.76x	yes	Exit EV/EBITDA: 13.2x / 15.2x / 17.2x (bear / base = today's held flat / bull), 6yr
Relative Valuation	Relative	$947.98	0.52x	yes	P/E 35x (static sector reference · 2026-04), scenarios: 29.0x / 35.0x / 41.0x (bear / base = reference held flat / bull), EV/EBITDA 25x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$261.88	1.88x	yes	BV/sh $193.10, ROE (TTM) 12.5%, ke 9.3%
Two-Stage Excess Return	Asset	$302.75	1.62x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$418.57	1.17x	yes	Rev $9.2B, growth 10% (input: historical growth; tapered), Terminal P/S: 1.0x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair Value	Relative	$344.22	1.43x	yes	EPS $24.21, growth 14% (input: historical EPS growth), PEG=1.43 (Fair)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$90.99	5.40x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.65B × (1−26%) / WACC 6.3% → EPV (no growth)
Residual Income	Asset	$311.25	1.58x	yes	BV $193.10 + 5yr PV of (ROE (TTM) 12.5% − Kₑ 9.3%) × BV; BV grows 8.2%/yr
Graham Number	Asset	$324.33	1.51x	yes	√(22.5 × EPS $24.21 × BVPS $193.10) — Graham's conservative floor
EV/EBITDA Relative	Relative	$966.70	0.51x	yes	EBITDA $1.08B × sector EV/EBITDA 25.0x
FCF Yield	Earnings	$32.87	14.95x	yes	FCF $576.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$0.01	49130.50x	yes	SBC-adj FCF $0.51B (FCF $0.58B − SBC $0.07B) capitalized at Kₑ (excluded from median)
Ben Graham Formula	Earnings	$749.45	0.66x	yes	EPS $24.21 × (8.5 + 2×14.2%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$52.78	9.31x	yes	BV $193.10 × (ROIC 1.7% / WACC 6.3%)
P/Sales Sector	Relative	$3307.15	0.15x	yes	Revenue $9.16B × sector P/S 8.0x
PEG Fair Value	Relative	$516.34	0.95x	yes	EPS $24.21 × (PEG 1.5 × growth 14.2% (input: historical EPS growth)) → PE 21.3x
Earnings Yield	Earnings	$261.73	1.88x	yes	EPS $24.21 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$5.0b
Net debt / NOPAT (after-tax)	7.96x
Net debt / operating income (pre-tax)	5.88x
Interest coverage	4.5x
Share count CAGR (buyback)	-1.6%
Burning cash	no

Bullet Takeaways

• Nearly all of the revenue here comes from a single customer, with the FY2025 10-K reporting federal government contracts accounting for 95.7% and 95.1% of our total revenues in fiscal 2025 and 2024, respectively, roughly three quarters of it defense and intelligence work.
• Growth is what separates this name from its cohort right now, at about 9.6% over the trailing year against SAIC shrinking 2.9% and PSN shrinking 6.9%, though part of it was bought with borrowed money that leaves interest covered about 4.5 times by operating income.
• The next read arrives with fiscal fourth-quarter results on August 5, 2026, and the first line to check is total backlog, which eased to $31.4 billion at June 30, 2025 from $31.6 billion a year earlier.

Bull Case

Start with one number, because one number carries this thesis further than any other. Total backlog at the last fiscal year end was $31.4 billion. Against trailing revenue of roughly $9.2 billion, that is close to three and a half years of work already awarded, and the FY2025 10-K states it plainly: As of June 30, 2025, the Company had total backlog of $31.4 billion, compared with $31.6 billion a year ago, a decrease of 0.6%. Move that figure meaningfully in either direction and the entire read on this company changes. Everything else is commentary on it.

Backlog of that size does something specific to the risk profile: it converts a services business, normally a quarter-to-quarter hustle for headcount and task orders, into something closer to an annuity with a long tail. The caveat is real and the filing gives it: funded backlog was $4.2 billion, meaning the rest waits on appropriations and option exercises. But awarded work that has to be re-competed is a very different starting position from work that has to be won cold.

The contract mix is the second structural advantage, and it is the one most readers will not have thought about. Cost-plus-fee arrangements carry about 61% of revenue, fixed-price about 26%, and time-and-materials the remainder. On a cost-plus contract the customer reimburses allowable cost and pays a fee on top, so a program that runs long or hits inflation does not detonate the margin; it just earns its fee more slowly. That structure caps how good a year can get and puts a floor under how bad one can be. For a company carrying real debt, having the majority of revenue in the form that cannot produce a surprise cost overrun matters more than an extra point of margin would.

Now the comparison that makes the case. Revenue grew about 9.6% over the trailing year at a 9.4% trailing operating margin. Over the same stretch SAIC's revenue fell 2.9% on a 7.9% operating margin and PSN's fell 6.9% on 6.4%. LDOS keeps a bigger slice of each revenue dollar, at a 12.0% operating margin on $17.329 billion, but grew 2.3%. In a cohort where the median outcome has been flat-to-shrinking, this is the one taking share, and it is doing it while the buyer's own procurement behavior has become less punishing: the 10-K observes that We believe that our customers' use of lowest price/technically acceptable (LPTA) procurements, which contributed to pricing pressures in past years, has moderated, though price still remains an important factor in procurements. Less price-only bidding is a margin tailwind that does not show up in any single quarter.

The demand side is concentrated but not fashionable, which is the point. Around three quarters of revenue serves defense and intelligence customers, a budget line that survives administrations. And here is what makes the setup unusual: at today's price the market is capitalizing the company at roughly 19 times its trailing operating income, and at that level the price embeds company-wide operating income declining about 0.9% a year over the next five years. The bull case does not need this business to accelerate. It needs it not to shrink. Management has raised its guidance on 34 separate occasions since 2006 against a single cut, which is a long record of not shrinking.

The share count has drifted down about 1.6% a year since March 2022. Modest, but it is the direction that compounds rather than dilutes.

Bear Case

Look at what has been bought and how it was paid for. Goodwill accounted for five billion dollars of total assets at the last fiscal year end, and net borrowings sit near the same figure today. That symmetry is not a coincidence: this company has been assembled, and the cost of the assembly is still sitting on both sides of the balance sheet. The FY2025 10-K names the test goodwill lives under: We evaluate the recoverability of goodwill amounts annually or when evidence of potential impairment exists. Acquired growth is real growth right up until an impairment says it was not.

The filing is candid that the model depends on the deal market staying open. Among the acquisition risks it lists is that acquisition financing may not be available on reasonable terms or at all. Interest is covered about 4.5 times by operating income, which is comfortable for servicing what exists and thin for adding much more at higher coupons. A serial acquirer that cannot borrow cheaply is just a services company with a slower growth rate, and the growth rate is the thing the market is paying for here.

The customer relationship is the second exposure, and it is unusually one-sided. Federal contracts accounted for 95.7% of revenue in fiscal 2025. Concentration alone would be manageable; the terms make it sharper. As the 10-K puts it, Essentially all contracts with the U.S. government, and many contracts with other government entities, permit the government customer to terminate for convenience. Backlog, the number the bull leans on, is therefore a schedule of intentions rather than a schedule of obligations. Only $4.2 billion of the $31.4 billion total was funded at fiscal year end, which is to say roughly one dollar in seven had actually been appropriated. And the total itself edged down over the year rather than up.

Then the valuation, which is where the bear has to be careful and precise. The price is not stretched against the growth it embeds; that assumption is undemanding and broadly consistent with what the business has delivered. It is stretched against what the company earns on the capital it employs. Return on equity ran about 12.5% over the trailing year against a cost of equity around 9.3%, a spread of roughly three points. That thin a spread is why the price sits about 61% above where the book-value-plus-profitability methods land, and why the earnings-power approaches, which capitalize a normalized profit stream with no growth credited, land below the price as well. The support for the current price comes from what comparable services companies fetch on sector multiples and from a cash-flow calculation that carries today's enterprise-to-EBITDA exit multiple flat into its terminal year. Neither of those is an argument about this company's own returns. If the market decides to price government services on returns on capital rather than on revenue multiples, the compression happens without a single contract being lost.

Competition is not the dramatic risk, but it is the persistent one. LDOS operates at nearly $17.329 billion of revenue with a materially higher operating margin, and CTSH at $21.406 billion with a 15.8% operating margin. Scale in this business buys bid-and-proposal capacity and the ability to absorb a protest. The 10-K notes that award protests and procurement delays continue. Each delayed award is a quarter of revenue that shifts right, and for a company whose entire investment case rests on converting backlog faster than peers, timing slippage is the mechanism through which the story quietly stops being true.

Valuation

The starting point is what today's $486.76 actually asks of the business, and the answer is: surprisingly little. The market is capitalizing the company at roughly 19 times its trailing operating income, and at that level the price embeds company-wide operating income shrinking about 0.9% a year across a five-year stage. Set against a company that grew revenue about 9.6% over the trailing year, the embedded assumption is not the stretched part of this story.

Where the methods part company is on what the capital base is worth. The price sits about 61% above where the book-value-plus-profitability approaches land, and the earnings-power approaches, which capitalize a normalized profit stream and credit no growth at all, land below the price too. Reaching today's level requires either the sector-multiple lens or the forward cash-flow work, and the cash-flow route arrives only by holding the current exit multiple on enterprise value to EBITDA steady all the way into its sixth year. So the honest summary of the disagreement is this: on what the business owns and on what it currently earns, the price looks full; on what services companies trade for and on cash flows six years out, it does not.

The reconciling fact is the return on capital. Return on equity ran about 12.5% over the trailing year against a cost of equity near 9.3%. A company earning three points above its cost of equity creates value, but slowly, which is exactly why methods anchored on book value cannot climb far enough to meet it. Book value per share covers only about two fifths of the quoted price. What is being paid for is the contract franchise, not the balance sheet.

That franchise is documented rather than assumed. The FY2025 10-K reports federal government contracts at 95.7% of fiscal 2025 revenue, and total backlog of $31.4 billion at June 30, 2025 with Funded backlog as of June 30, 2025 was $4.2 billion. Backlog near three and a half times annual revenue is the asset that does not appear in book value, and it is the reason a book-based read understates what a buyer is acquiring. It is also why goodwill of roughly five billion dollars on the balance sheet is more defensible here than it would be at a company whose acquisitions bought only headcount.

On cohort position, the multiple sits in the lower half of the comparable range while the growth sits at the top of it. LDOS earns a 12.0% operating margin on $17.329 billion of revenue and grew 2.3%; CTSH earns 15.8% on $21.406 billion and grew 6.5%; SAIC earns 7.9% and shrank 2.9%. The subject's 9.4% trailing operating margin is mid-pack, and its growth is not.

The balance sheet is where the caution lives. Net borrowings near five billion dollars leave operating income covering interest about 4.5 times, and the company is not burning cash, with the share count down roughly 1.6% a year since March 2022. That coverage is adequate for the debt in place and unremarkable for a business whose growth engine has partly been acquisition. What the price is really underwriting is that the backlog keeps converting while the debt behind the acquisitions runs off, and the funded portion of that backlog is the one number that tells you which way it is going.

Catalysts

July was a heavy award month. The company disclosed a five-year contract worth up to $113 million from the Navy's Military Sealift Command to continue modernizing its systems, a six-year Department of Veterans Affairs award worth up to $308 million for financial management systems modernization, a ceiling increase of more than $140.5 million on an existing Army DEVCOM contract, and an award to deploy its SkyValor counter-drone system on the southern border. Awards of this type are ceilings rather than booked revenue, and they land in total backlog long before they land in the income statement, which is why the backlog line is the place to watch them arrive.

Fiscal fourth-quarter and full-year results are scheduled for August 5, 2026. Because the fiscal year ends in June, this is the print that resets the backlog figure the whole investment case leans on, and it is the first opportunity to see whether the July award flow shows up as a total backlog that stops drifting down.

The sell side trimmed into it. Jefferies cut its target to $510 from $550 and Citi to $519 from $555 in late June. Both revised figures still sit above today's price and land in the same territory as the sector-multiple comparisons, so this reads as the street marking down within its existing frame rather than changing how it values the business.

Peer Cohorts (Per Segment, With Filing Citations)

Domestic Operations / International Operations (reported)

• SAIC (Science Applications International Corporation)
• FY2025 10-K: …offset by ramp up in volume on existing and new contracts. 28 Table of Contents SCIENCE APPLICATIONS INTERNATIONAL CORPORATION Operating and adjusted operating income. Operating and adjusted operating income as a percentage of revenues increased from fiscal 2024 to fiscal 2025 primarily due to ramp up in volume on…
• FY2025 10-K: …was immaterial . During fiscal 2023, operating lease income was $ 2 million, and revenue recognized from the exercise of purchase options under certain lessor arrangements was $ 23 million. Note 16-Business Segments Information : Effective February 3, 2024, the first day of fiscal 2025, the Company completed a…
• LDOS (Leidos Holdings, Inc.)
• FY2025 10-K: …our future revenues, profitability, and prospects. Additionally, the DoW and other customers are increasingly pursuing rapid acquisition pathways and procedures for new technologies, including through so-called "other transaction authority" agreements ("OTAs"). OTAs are exempt from many traditional procurement laws,…
• FY2025 10-K: Income tax expense," as reported in the consolidated financial statements are not allocated to our segments. Other segment expenses include direct program costs such as materials and subcontractor expenses, as well as allocable indirect costs such as depreciation and Corporate compensation expenses, but excludes…
• PSN (Parsons Corporation)
• FY2025 10-K: …are subject to Federal Acquisition Regulation, or FAR, Defense Federal Acquisition Regulation, or DFARS, the Truthful Cost and Pricing Data Act, Cost Accounting Standards, or CAS, the Services Contract Act, the False Claims Act, 19 export controls rules and U.S. Department of War security regulations, as well as…
• FY2025 10-K: …for the development of integrated and layered missile defense systems that defend U.S. and allied forces against ballistic, hypersonic, and cruise missile threats, and 3 advance the agency's integrated air and missile defense, command and control, and battle management and communications missions across all-domain…
• KD (Kyndryl Holdings, Inc.)
• FY2025 10-K: …cash payments of $ 14 million, non-cash adjustments of $ 1 million and ending balance of $ 16 million related to actions initiated by the former Parent. Workforce rebalancing liabilities are recorded within Other Liabilities; refer to Note 13 - Other Liabilities for further details. ​ ​ ​ ​ ​ Item 9. Changes in and…
• FY2025 10-K: …market transactions and may also repurchase shares in accelerated share buyback programs, tender offers, privately negotiated transactions or by other means. Repurchases may also be made under a Rule 10b5-1 trading plan. The timing and amount of repurchase transactions will be determined by the Company's management…
• CTSH (COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION)
• FY2025 10-K: …of the OBBBA. See Note 10 to our consolidated financial statements for additional information. Liquidity and Capital Resources Cash generated from operations has historically been our primary source of liquidity to fund operations and investments t o grow our business. As of December 31, 2025, we had cash, cash…
• FY2025 10-K: …9 to our consolidated financial statements. Capital Allocation Framework Acquisitions Share repurchases Dividend payments Our capital allocation framework anticipates the deployment of approximately 50% of our free cash flow 6 for acquisitions and 50% for share repurchases and dividend payments. We review our capital…
• EPAM (EPAM SYSTEMS, INC.)
• FY2025 10-K: …an allocation of certain shared services expenses. Intersegment transactions are excluded from the segment's revenues and operating profit on the basis that they are neither included in the measure of a segment's profit and loss results, nor considered by the CODM during the review of segment results. Certain…
• FY2025 10-K: …prohibit activities involving restricted countries, organizations, entities and persons that have been identified as unlawful actors or that are subject to U.S. sanctions. The U.S. Office of Foreign Assets Control, or OFAC, and other domestic and international bodies have imposed sanctions that prohibit us from…
• WIT (WIPRO LIMITED)
• (no filing in the citation store)
• DOX (AMDOCS LIMITED)
• FY2025 20-F: Amdocs, Inc. Attention: Matthew E. Smith 625 Maryville Centre Drive, Suite 200 Saint Louis, Missouri 63141 Telephone: 314-212-7000 Subsidiary Information Not applicable. Annual Report to Security Holders If we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we…
• FY2025 20-F: …project. Our audit procedures included, among others, evaluating the labor effort used in management's estimate through the life of the project. For example, for a sample of contracts, we tested management's estimate of total projected labor effort through a combination of analytical procedures, such as comparison of…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

company release via Business Wire, July 2026 · company announcement reported July 2026 · company earnings calendar, July 2026 · analyst notes reported June 2026