CACI International (NYSE:CACI) share rose more than 2% pre-market today after Raymond James analysts upgraded the stock from Market Perform to Outperform, assigning a price target of $475. The upgrade reflects the company’s attractive valuation and a favorable shift in its business mix toward high-value technology offerings.
CACI is currently trading at approximately 10.4 times its EBITDA, representing an unusually low discount relative to its historical sum-of-the-parts (SOTP) valuation and about 15% below its five-year average multiple. This undervaluation underscores the potential for a significant re-rating, particularly given the strategic evolution of its business.
Over the past eight years, CACI has transitioned its portfolio from being predominantly expertise-based—historically 80% of its operations—to focusing more heavily on technology-driven solutions. This shift has enhanced profitability, adding roughly 200 basis points to EBITDA margins. More recently, the company has demonstrated accelerated organic growth, further solidifying its position in the government IT sector.
According to the analysts, the positive changes in CACI’s business fundamentals suggest the potential for a return to the higher valuation multiples observed prior to the last election.