We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is CACI International (CACI) Down 2.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for CACI International (CACI - Free Report) . Shares have lost about 2.2% 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 Q2 Earnings Miss Estimates and Revenues Outperform
CACI reported mixed second-quarter fiscal 2023 results, wherein earnings missed the Zacks Consensus Estimate, while revenues surpassed the same.
The national security-related IT solutions and services provider reported non-GAAP earnings of $4.28 per share, missing the Zacks Consensus Estimate of $4.35. Moreover, the bottom line decreased 2.5% from the year-ago quarter’s figure of $4.39 per share. This decrease in earnings was primarily due to higher interest expenses and a higher tax rate.
In the second quarter of fiscal 2023, CACI reported revenues of $1.65 billion, surpassing the Zacks Consensus Estimate of $1.61 billion. Moreover, the top line increased 11% from the prior-year quarter, primarily driven by acquisitions completed earlier this year and an increase of 6% in organic revenues.
Quarterly Details
In the second quarter, contract awards totaled $3.5 billion, with more than 70% 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 $26.5 billion, up 10% on a year-over-year basis. As of Dec 31, 2022, the funded backlog increased by 3% to $3.2 billion.
In terms of the customer mix, the Department of Defense contributed 70.4% to total revenues in the reported quarter. Federal Civilian Agencies made up 24.2%, while Commercial and other customers accounted for 5.4% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 88.6% and 11.4% of the total revenues, respectively. In terms of contract type, cost-plus-fee-type contracts, fixed-price contracts, and time and material-type contracts contributed 57.8%, 30.9% and 11.8%, respectively, to total revenues.
Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 45% and 55% of the total revenues, respectively. The operating income for the quarter amounted to $130.9 million, up 5.4% year over year. The operating margin contracted by 50 basis points (bps) to 7.9%.
Adjusted EBITDA increased 6.6% year over year to $168.4 million. The adjusted EBITDA margin contracted by 40 bps to 10.2%.
Balance Sheet & Cash Flow
As of Dec 31, 2022, CACI had cash and cash equivalents of $114.7 million compared with the previous quarter’s $136.6 million. The total long-term (net of the current portion) debt was $1.53 billion, down from $1.6 billion as of Dec 31, 2022.
The company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) of $22 million in the second quarter, declining by 82.9% from the year-ago quarter. Free cash flow was $9.1 million during the quarter under review.
CACI Reaffirms Fiscal 2023 Guidance
CACI continues to project revenues between $6.475 billion and $6.675 billion in fiscal 2023. Adjusted earnings are projected in the range of $17.65-$18.49 per share.
The company expects the fiscal 2023 adjusted net income in the range of $420-440 million. It estimates free cash flow of at least $320 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, CACI International has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, CACI International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is CACI International (CACI) Down 2.2% Since Last Earnings Report?
A month has gone by since the last earnings report for CACI International (CACI - Free Report) . Shares have lost about 2.2% 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 Q2 Earnings Miss Estimates and Revenues Outperform
CACI reported mixed second-quarter fiscal 2023 results, wherein earnings missed the Zacks Consensus Estimate, while revenues surpassed the same.
The national security-related IT solutions and services provider reported non-GAAP earnings of $4.28 per share, missing the Zacks Consensus Estimate of $4.35. Moreover, the bottom line decreased 2.5% from the year-ago quarter’s figure of $4.39 per share. This decrease in earnings was primarily due to higher interest expenses and a higher tax rate.
In the second quarter of fiscal 2023, CACI reported revenues of $1.65 billion, surpassing the Zacks Consensus Estimate of $1.61 billion. Moreover, the top line increased 11% from the prior-year quarter, primarily driven by acquisitions completed earlier this year and an increase of 6% in organic revenues.
Quarterly Details
In the second quarter, contract awards totaled $3.5 billion, with more than 70% 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 $26.5 billion, up 10% on a year-over-year basis. As of Dec 31, 2022, the funded backlog increased by 3% to $3.2 billion.
In terms of the customer mix, the Department of Defense contributed 70.4% to total revenues in the reported quarter. Federal Civilian Agencies made up 24.2%, while Commercial and other customers accounted for 5.4% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 88.6% and 11.4% of the total revenues, respectively. In terms of contract type, cost-plus-fee-type contracts, fixed-price contracts, and time and material-type contracts contributed 57.8%, 30.9% and 11.8%, respectively, to total revenues.
Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 45% and 55% of the total revenues, respectively. The operating income for the quarter amounted to $130.9 million, up 5.4% year over year. The operating margin contracted by 50 basis points (bps) to 7.9%.
Adjusted EBITDA increased 6.6% year over year to $168.4 million. The adjusted EBITDA margin contracted by 40 bps to 10.2%.
Balance Sheet & Cash Flow
As of Dec 31, 2022, CACI had cash and cash equivalents of $114.7 million compared with the previous quarter’s $136.6 million. The total long-term (net of the current portion) debt was $1.53 billion, down from $1.6 billion as of Dec 31, 2022.
The company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) of $22 million in the second quarter, declining by 82.9% from the year-ago quarter. Free cash flow was $9.1 million during the quarter under review.
CACI Reaffirms Fiscal 2023 Guidance
CACI continues to project revenues between $6.475 billion and $6.675 billion in fiscal 2023. Adjusted earnings are projected in the range of $17.65-$18.49 per share.
The company expects the fiscal 2023 adjusted net income in the range of $420-440 million. It estimates free cash flow of at least $320 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, CACI International has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, CACI International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.