CACI vs PSN

Key Takeaways

• CACI International (CACI) and Parsons Corporation (PSN) are both prominent government services and technology contractors, yet they differ meaningfully in scale, business mix, and recent market momentum.
• CACI has delivered double-digit revenue growth, driven by strong organic expansion in defense, intelligence, and space markets, supported by a backlog exceeding $33 billion.
• PSN faces headwinds from the wind-down of a significant confidential contract, though its core Critical Infrastructure and Federal Solutions segments continue to show mid-single-digit to double-digit organic growth.
• Valuation diverges sharply: CACI trades at a forward P/E (price-to-earnings ratio) near 17–18, while PSN carries a trailing P/E above 28, reflecting differing growth visibility and risk profiles.
• Analyst sentiment currently leans more constructively toward CACI, with Goldman Sachs upgrading the stock to Buy in recent months, while PSN was downgraded to Neutral amid uncertainty around its confidential contract trajectory.
• Both stocks have experienced significant price corrections from their 52-week highs, but their near-term recovery patterns and relative positioning suggest different risk-reward profiles for investors.

Introduction

Investors tracking the government technology and defense services sector frequently encounter two compelling but distinct names: CACI International and Parsons Corporation. Both companies serve critical national security and infrastructure missions, yet their growth trajectories, margin profiles, and risk exposures have diverged in meaningful ways over recent quarters. This stock comparison examines how CACI and PSN stack up across business fundamentals, recent performance, market sentiment, and near-term catalysts. Whether you are a defense-sector specialist seeking relative value or a generalist evaluating government IT exposure, understanding the trade-offs between these two stocks is increasingly relevant given the evolving federal budget environment and shifting contract landscapes.

CACI Overview and Recent Performance

CACI International is a Reston, Virginia-based provider of expertise and technology to U.S. government customers, primarily in defense, intelligence, and federal civilian markets. The company employs approximately 25,000 people and has strategically pivoted toward higher-value, technology-driven solutions in areas such as electronic warfare, signals intelligence, space communications, and advanced software development.

On the financial front, CACI closed its fiscal year 2025 (ended June 30, 2025) with annual revenues of $8.6 billion, representing a 13% year-over-year increase, while adjusted diluted EPS (earnings per share) surged 26% to $26.48. The company generated $9.6 billion in contract awards, achieving a book-to-bill ratio of 1.1x — meaning it booked more new work than it recognized as revenue. In its fiscal 2026 second quarter (ended December 31, 2025), CACI reported revenue of $2.22 billion, up 5.7% year-over-year, with adjusted diluted EPS of $6.81, up 14.5%. Free cash flow more than doubled compared to the prior-year period, reflecting improved working capital management.

In recent months, CACI has continued strengthening its backlog, which stood at approximately $33.9 billion as of September 2025. The company has also announced plans to acquire ARKA Group, a move that would deepen its footprint in space-based intelligence and technology — an area of increasing Pentagon investment. Shares of CACI have pulled back from a 52-week high of $683.50, recently trading near the $487–$497 range, but the stock's lower valuation multiple (trailing P/E around 20) relative to peers has attracted analyst attention, including an upgrade from Goldman Sachs to Buy in August 2025.

PSN Overview and Recent Performance

Parsons Corporation, headquartered in Chantilly, Virginia, operates across two complementary segments: Federal Solutions (cyber, intelligence, space, and missile defense) and Critical Infrastructure (transportation, environmental remediation, and urban development). The company's diversified portfolio of six end-markets provides exposure to both defense spending and global infrastructure investment trends.

PSN reported full-year 2025 revenue of $6.4 billion, a headline decline of 6% year-over-year. However, excluding a confidential federal contract that has been winding down, total revenue grew 12% and organic revenue grew 8%. The company delivered record adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $609 million, with margins expanding to 9.6%. Net income reached a record $241 million. During fiscal year 2025, PSN won 15 contracts each worth $100 million or more, matching its previous annual record.

Recent contract wins have reinforced the growth narrative, including a ten-year, $392 million biometrics and network engineering award and a $593 million FAA (Federal Aviation Administration) contract extension supporting the agency's capital investment plan. Still, the company's near-term outlook is clouded by the confidential contract's continued decline, which creates challenging year-over-year comparisons. Goldman Sachs downgraded PSN to Neutral in mid-2025, citing uncertainty around growth visibility once that contract fully rolls off. The stock has been under considerable pressure, falling from a 52-week high of $89.50 to recent levels around $58–$59, though it has shown signs of stabilization in recent weeks.

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Head-to-Head Comparison

When comparing CACI and PSN, several contrasts stand out. First, scale and concentration: CACI generates roughly $9.2–$9.4 billion in projected annual revenue versus approximately $6.5–$6.8 billion for PSN. CACI is more concentrated in defense and intelligence, while PSN benefits from a more diversified revenue stream that includes non-defense infrastructure spending, particularly in the Middle East and North America.

Second, growth trajectory: CACI has posted consistently positive headline revenue growth, driven by strong organic expansion and strategic acquisitions. PSN, by contrast, has been grappling with the optics of a headline revenue decline — even though its core business, excluding the confidential contract, is growing at a healthy mid-to-high single-digit pace. This divergence makes CACI's growth narrative more straightforward and easier for the market to model.

Third, valuation and leverage: CACI carries significantly more debt (approximately $5.6 billion versus $1.7 billion for PSN), but its lower P/E ratio — roughly 20x trailing versus 28x for PSN — suggests the market is applying a discount for that higher leverage or rewarding PSN with a premium for its infrastructure diversification. Notably, PSN holds more cash on its balance sheet and maintains a less leveraged capital structure.

Fourth, risk factors: For CACI, primary risks include execution on large fixed-price contracts, integration of acquisitions like ARKA Group, and sensitivity to shifts in defense budget priorities. For PSN, the most prominent near-term risk is the continued drag from the confidential contract and the uncertainty around whether new wins can fully offset that revenue headwind in fiscal year 2026.

Finally, market sentiment and price action: Both stocks have undergone significant corrections from their 52-week highs. CACI has declined roughly 27% from its peak of $683.50, while PSN has fallen approximately 34% from its high of $89.50. In recent weeks, however, PSN has shown stronger relative momentum on a short-term basis, recovering from its 52-week low of $46.88 with a series of higher daily closes — though it remains to be seen whether this signals a durable trend reversal or a tactical bounce.

Tickeron AI Verdict

Based on observable trend consistency, growth visibility, and relative valuation, Tickeron's AI-driven analytical framework would likely favor CACI over PSN in the current environment. CACI benefits from a cleaner growth narrative, a robust and expanding backlog exceeding $33 billion, strong free cash flow generation, and a valuation multiple that appears more forgiving relative to its earnings power. While PSN offers an attractive diversification story and compelling long-term tailwinds in global infrastructure, the overhang from its confidential contract and a higher valuation multiple introduce a greater degree of probabilistic uncertainty. In a side-by-side assessment emphasizing trend reliability and near-term catalyst clarity, CACI currently presents the more consistent risk-reward profile. This conclusion reflects an objective, probability-weighted comparison rather than a definitive prediction, and market conditions can shift rapidly as new data emerges.

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