An Intrinsic Calculation For CACI International Inc (NYSE:CACI) Suggests It's 44% Undervalued

Simply Wall St.11-16

Key Insights Using the 2 Stage Free Cash Flow to Equity, CACI International fair value estimate is US$837 Current share price of US$471 suggests CACI International is potentially 44% undervalued ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAn Intrinsic Calculation For CACI International Inc (NYSE:CACI) Suggests It's 44% Undervalued\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-16 21:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/intrinsic-calculation-caci-international-inc-132433245.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key Insights\n\n Using the 2 Stage Free Cash Flow to Equity, CACI International fair value estimate is US$837 \n Current share price of US$471 suggests CACI International is potentially 44% undervalued \n...</p>\n\n<a href=\"https://finance.yahoo.com/news/intrinsic-calculation-caci-international-inc-132433245.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FCF","symbol_name":"第一联邦金融","start_time":0,"source_url":"https://finance.yahoo.com/news/intrinsic-calculation-caci-international-inc-132433245.html","article_id":"2483519843","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/vAb1AaKiRI2SntuMfxvkIg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/cf3f0369cec0a4d8742d0cfe2fa44bae"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2483519843","pubTimestamp":1731763473,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Using the 2 Stage Free Cash Flow to Equity, CACI International fair value estimate is US$837. Current share price of US$471 suggests CACI International is potentially 44% undervalued. Our fair value estimate is 36% higher than CACI International's analyst price target of US$616. In this article we are going to estimate the intrinsic value of CACI International Inc  by projecting its future cash flows and then discounting them to today's value. We will use the Discounted Cash Flow  model on this occasion. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FCF":"第一联邦金融","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","CACI":"CACI国际","LU1169590202.USD":"ALLSPRING (LUX)  U.S. SELECT EQUITY \"I\" (USD) ACC","LU0054578231.USD":"BGF SYSTEMATIC SUSTAINABLE GLOBAL SMALLCAP \"A2\" (USD) ACC","LU1169589451.USD":"ALLSPRING (LUX)  U.S. SELECT EQUITY \"A\" (USD) ACC","BK4100":"有线和卫星","BK4123":"调查和咨询服务","BK4211":"区域性银行","NYSE":"纽交所","LU2247934214.USD":"FIDELITY FUNDS SUSTAINABLE FUTURE CONNECTIVITY \"A\" (USD) ACC","TV":"墨西哥电视"},"translate_title":"CACI International Inc（纽约证券交易所股票代码：CACI）的内在计算表明其价值被低估了44%","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CACI":1,"DCF":1,"FCF":1,"NYSE":1,"TV":1},"content_text":"Key Insights\n\n Using the 2 Stage Free Cash Flow to Equity, CACI International fair value estimate is US$837 \n Current share price of US$471 suggests CACI International is potentially 44% undervalued \n Our fair value estimate is 36% higher than CACI International's analyst price target of US$616 \n\n In this article we are going to estimate the intrinsic value of CACI International Inc (NYSE:CACI) by projecting its future cash flows and then discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. \n We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. \n View our latest analysis for CACI International \n Step By Step Through The Calculation \n We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. \n Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: \n 10-year free cash flow (FCF) forecast \n\n\n\n\n2025\n2026\n2027\n2028\n2029\n2030\n2031\n2032\n2033\n2034\n\n\n Levered FCF ($, Millions) \nUS$451.2m\nUS$564.3m\nUS$633.8m\nUS$717.0m\nUS$779.4m\nUS$833.0m\nUS$879.7m\nUS$921.1m\nUS$958.7m\nUS$993.6m\n\n\nGrowth Rate Estimate Source\nAnalyst x4\nAnalyst x5\nAnalyst x4\nAnalyst x1\nEst @ 8.70%\nEst @ 6.88%\nEst @ 5.60%\nEst @ 4.71%\nEst @ 4.08%\nEst @ 3.64%\n\n\n Present Value ($, Millions) Discounted @ 6.6% \nUS$423\nUS$496\nUS$523\nUS$555\nUS$566\nUS$567\nUS$562\nUS$552\nUS$539\nUS$524\n\n\n\n(\"Est\" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$5.3b\n After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.6%. \nTerminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$994m× (1 + 2.6%) ÷ (6.6%– 2.6%) = US$26b\nPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= US$26b÷ ( 1 + 6.6%)10= US$13b\n The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$19b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$471, the company appears quite undervalued at a 44% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. \n\n\n\n  NYSE:CACI Discounted Cash Flow November 16th 2024\n \n\n The Assumptions \n Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at CACI International as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.6%, which is based on a levered beta of 0.970. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. \nSWOT Analysis for CACI International\n\n\nStrength\n\nEarnings growth over the past year exceeded the industry.\n\n\nDebt is not viewed as a risk.\n\n\nBalance sheet summary for CACI.\n\n\n\nWeakness\n\n No major weaknesses identified for CACI.\n\n\n\nOpportunity\n\nAnnual earnings are forecast to grow for the next 3 years.\n\n\nGood value based on P/E ratio and estimated fair value.\n\n\n\nThreat\n\n Annual earnings are forecast to grow slower than the American market.\n\n\nWhat else are analysts forecasting for CACI?\n\n\n\n Next Steps: \n Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Why is the intrinsic value higher than the current share price? For CACI International, there are three important factors you should explore: \n\n Risks: Consider for instance, the ever-present spectre of investment risk.   We've identified 1 warning sign  with CACI International , and understanding this should be part of your investment process. \n Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for CACI's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. \n Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! \n\n PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.\nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483519843"}