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Why CACI International (CACI) Stock Is Falling on Thursday

Stocks in this article: CACI

NEW YORK (TheStreet) -- CACI International (CACI) is dropping on Thursday after management issued downwardly revised earnings and revenue guidance for fiscal 2014.

Shares had taken off 4.5% to $71.21 by early afternoon. Trading volume of 1.1 million was more than double its three-month daily average.

In a statement, the national security tech specialist said it had experienced delays in contract awards for new business, lower run-rates on professional services contracts and a reduction in Afghanistan-related revenue.

For the full-year ending June, the company said it expects revenue between $3.5 billion and $3.6 billion, lower than previous guidance for $3.65 billion to $3.8 billion.

Net income is expected in the range of $5.12 to $5.51 a share. Management had previously guided for $5.59 to $5.98 a share.

Analysts surveyed by Thomson Reuters forecast earnings of $5.78 a share and revenue of $3.71 billion.

CACI International will release its third-quarter results on April 30 after market close.

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TheStreet Ratings team rates CACI INTL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CACI INTL INC (CACI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, CACI's share price has jumped by 30.52%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CACI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Even though the current debt-to-equity ratio is 1.13, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Despite the fact that CACI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.64 is high and demonstrates strong liquidity.
  • Despite the weak revenue results, CACI has outperformed against the industry average of 20.4%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CACI INTL INC's earnings per share declined by 18.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CACI INTL INC increased its bottom line by earning $6.36 versus $5.96 in the prior year. For the next year, the market is expecting a contraction of 9.5% in earnings ($5.76 versus $6.36).

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