CACI International (CACI) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of CACI International (CACI)? Shares have been on the move with the stock up 1.5% over the past month. CACI hit a new 52-week high of $183.45 in the previous session. CACI International has gained 37.4% since the start of the year compared to the 11.1% move for the Computer and Technology sector and the 8% year-to-date return for its peer group.
What’s Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 2, 2018, CACI International reported EPS of $2.33 versus consensus estimate of $1.8.
For the current fiscal year, CACI International is expected to post earnings of $9.2 per share on $4.47 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $9.78 per share on $4.66 billion in revenues. This represents a year-over-year change of -21.12% and 4.29%, respectively.
While CACI has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
CACI International has a Value Score of B. The stock’s Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 19.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 18.5X versus its peer group’s average of 18.5X. Additionally, the stock has a PEG ratio of 1.98. This isn’t enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CACI International currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CACI International passes the test. Thus, it seems as though CACI shares could have potential in the weeks and months to come.
How Does CACI International Stack Up to the Competition?
Shares of CACI International have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Syntel (SYNT), Virtusa (VRTU), and ManTech International (MANT), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 38% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CACI, even beyond its own solid fundamental situation.
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CACI International, Inc. (CACI): Free Stock Analysis Report
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