Is CACI International Fairly Priced After Recent Surge and New Government Contracts in 2025?

Thinking about whether to buy, hold, or sell CACI International? You’re not alone. This stock has been catching eyes for its surprising resilience and growth. If you’ve been tracking the ticker, you know that CACI’s recent price moves have been nothing short of impressive. Over the past month alone, the stock surged by nearly 18% and boasts a year-to-date climb of almost 40%. Even over longer periods, the returns are strong, with 89% in the past three years and a staggering 160.5% in five years.

What’s behind these numbers? In the past few months, CACI has appeared in headlines for a series of high-profile government contracts and technology upgrades. This signals growing confidence in both its core defense business and new tech initiatives. These wins have added some extra lift to its shares and fueled optimism that the company’s long-term strategy is driving real value rather than just trading on buzz.

Looking at the big picture, CACI currently holds a value score of 5 out of 6, meaning it is considered undervalued by nearly every metric we checked. That is an impressive mark, especially given its recent upward momentum. But how do these valuation signals actually stack up when you put them under the microscope? Let’s walk through the different approaches to valuing CACI. Stay tuned, as there could be an even better way to assess what this stock is really worth.

CACI International delivered 1.6% returns over the last year. See how this stacks up to the rest of the Professional Services industry.

Approach 1: CACI International Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a popular valuation approach that projects a company’s future cash flows and then discounts them back to today’s value. This method aims to estimate what the business is fundamentally worth, based on its ability to generate cash in the years ahead.

For CACI International, the most recent reported Free Cash Flow stands at $609.60 million. Analyst consensus projects steady growth, with estimated annual cash flows rising to $785 million by 2028. Beyond this, further projections up to 2035 are extrapolated, indicating a continued upward trend in cash generation. All values are calculated in dollars and reflect both near- and long-term confidence in CACI's business operations.

Based on this DCF model, the intrinsic value for CACI shares is estimated at $729.70. This figure is about 21.5% higher than the company’s current market price, which implies a notable undervaluation. The numbers suggest that the market may not fully appreciate CACI’s future earnings potential at this time.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for CACI International.

Our Discounted Cash Flow (DCF) analysis suggests CACI International is undervalued by 21.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: CACI International Price vs Earnings

The Price-to-Earnings (PE) ratio is commonly used to value profitable companies because it reflects how much investors are willing to pay for each dollar of a firm's earnings. For a consistently strong performer like CACI International, the PE ratio can serve as a quick barometer for market sentiment and earnings power.

However, what counts as a “normal” or “fair” PE depends on several factors. Companies with higher expected growth or lower risk often warrant higher PE ratios than slow-growing or more volatile peers. That means comparing PE ratios requires understanding not only current performance but also future outlook and risk profile.

Currently, CACI trades at a PE ratio of 25x. This sits below the industry average PE of 27.16x and well beneath the peer average of 34.18x within Professional Services. On the surface, this signals a relatively cheap valuation compared to similar firms.

But fair value is more nuanced than a simple comparison. Simply Wall St’s “Fair Ratio” uses a proprietary model to estimate what the PE should be for CACI specifically, accounting for its earnings growth, margins, risk profile, industry, and market cap. This makes the Fair Ratio (26.92x) a more tailored benchmark than generic industry and peer averages, giving investors a clearer guide for this particular stock.

With CACI’s current PE ratio of 25x being close to its Fair Ratio of 26.92x, the stock appears fairly valued by this method.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your CACI International Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives, a powerful yet approachable method used by millions on Simply Wall St's Community page to really connect a company’s story to the numbers behind fair value.

A Narrative is your chance to stitch together your perspective on CACI International, outlining what you believe about its future revenue, earnings, and margins, and why. Instead of just plugging numbers into a model, you describe the trends, catalysts, and risks you think matter, which in turn drive your forecast and the fair value you assign the stock. Narratives let you bring clarity to your investment thesis by linking real-world business developments with concrete financial expectations.

This tool makes it simple for any investor to build, share, and compare their Narrative as new information rolls in. Narratives are dynamic and automatically update when events like earnings or major news change the bigger picture, so your fair value always stays relevant.

For example, one bullish CACI International Narrative highlights expanding government funding and margin growth, assuming a fair value of $622.73 per share. A more cautious view points to reliance on U.S. contracts and industry risk, assigning a lower fair value target of $563.58. Narratives make these differing outlooks transparent, helping you decide how CACI’s current price aligns with your expectations.

Do you think there's more to the story for CACI International? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.