U.S. Markets closed

CACI International Inc (NYSE:CACI): Does The Earnings Decline Make It An Underperformer?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess CACI International Inc's (NYSE:CACI) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.

Check out our latest analysis for CACI International

Was CACI's recent earnings decline worse than the long-term trend and the industry?

CACI's trailing twelve-month earnings (from 31 March 2019) of US$267m has declined by -8.9% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 21%, indicating the rate at which CACI is growing has slowed down. Why is this? Let's examine what's occurring with margins and if the whole industry is feeling the heat.

NYSE:CACI Income Statement, June 12th 2019

In terms of returns from investment, CACI International has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 6.0% exceeds the US IT industry of 5.6%, indicating CACI International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for CACI International’s debt level, has increased over the past 3 years from 7.5% to 8.8%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 100% to 75% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. You should continue to research CACI International to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for CACI’s future growth? Take a look at our free research report of analyst consensus for CACI’s outlook.
  2. Financial Health: Are CACI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.