In August 2019, CACI International Inc (NYSE:CACI) released its latest earnings announcement, which showed that the business experienced a substantial headwind with earnings declining by -12%. Today I want to provide a brief commentary on how market analysts view CACI International's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts' outlook for the upcoming year seems optimistic, with earnings expanding by a robust 16%. This growth seems to continue into the following year with rates arriving at double digit 30% compared to today’s earnings, and finally hitting US$393m by 2022.
Even though it is informative knowing the growth rate each year relative to today’s figure, it may be more valuable to determine the rate at which the company is growing on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of CACI International's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 13%. This means that, we can expect CACI International will grow its earnings by 13% every year for the next few years.
For CACI International, there are three fundamental factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is CACI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CACI is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CACI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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 firstname.lastname@example.org. 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.