Investment Thesis
CACI demonstrates solid revenue growth of 12.6% YoY and strong free cash flow generation ($448.6M), but net income stagnation and elevated leverage (1.21x D/E) with limited cash reserves ($158M) present financial risks. The company's low profitability margins (5.5% net, 9.4% operating) and weak returns on capital (8.9% ROE, 3.3% ROA) suggest operational headwinds offsetting revenue expansion.
Strengths
- Strong revenue growth at 12.6% YoY demonstrating market demand and organic expansion
- Excellent free cash flow generation of $448.6M (6.5% FCF margin) showing strong cash conversion and operational efficiency
- Solid interest coverage ratio of 8.0x providing comfortable debt service capacity and financial flexibility
- Capital-light model with low capex requirements (0.87% of revenue) typical of services businesses
Risks
- Net income growth stalled at 0.0% YoY despite 12.6% revenue growth indicating margin compression and operational strain
- High financial leverage with 1.21x debt-to-equity ratio and only $158M cash relative to $5.2B long-term debt creates vulnerability
- Low profitability returns with net margin of 5.5%, ROE of 8.9%, and ROA of 3.3% limiting capital efficiency
- Weak current ratio of 1.61x and liquidity position insufficient relative to debt obligations
Key Metrics to Watch
- Net profit margin trend - monitor whether revenue growth can translate to earnings growth or if compression continues
- Operating cash flow and free cash flow sustainability - ensure $448.6M FCF level is maintained
- Debt reduction progress - track whether company prioritizes deleveraging given 1.21x D/E ratio
- Return metrics (ROE/ROA) - assess if capital efficiency improves or deteriorates in coming quarters
Financial Metrics
Revenue
6.9B
Net Income
379.1M
EPS (Diluted)
$17.11
Free Cash Flow
448.6M
Total Assets
11.6B
Cash
158.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
9.4%
Net Margin
5.5%
ROE
8.9%
ROA
3.3%
FCF Margin
6.5%
Balance Sheet & Liquidity
Current Ratio
1.61x
Quick Ratio
1.47x
Debt/Equity
1.21x
Debt/Assets
63.1%
Interest Coverage
8.02x
Long-term Debt
5.2B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-29T13:42:04.832322 |
Data as of: 2026-03-31 |
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