CACI upgraded, Parsons downgraded at Goldman Sachs on updated outlook

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Goldman Sachs on Wednesday revised its outlook on several government IT and services companies following a wave of second-quarter earnings reports and recent updates to the federal procurement environment. In a research note, analyst Noah Poponak announced two ratings changes, citing shifting market dynamics under the new U.S. administration.

CACI UPGRADED ON ADVANCED TECH GAINS

Goldman upgraded CACI International (NYSE:CACI [https://seekingalpha.com/symbol/CACI]) to Buy from a previous investment rating of Sell, calling it “the best positioned company in the space” since the change in U.S. administration.

He highlighted CACI’s trailing 12-month funded book-to-bill ratio above 1.0, along with margin expansion that exceeds peer averages, driven largely by a pivot toward advanced technologies.

“We expect it to grow faster than peers over the medium-term,” Poponak wrote, adding that on revised estimates, the stock is now less expensive than Booz Allen Hamilton (BAH [https://seekingalpha.com/symbol/BAH]) and Parsons (PSN [https://seekingalpha.com/symbol/PSN]).

PSN CUT TO NEUTRAL ON GROWTH UNCERTAINTY

Conversely, Goldman downgraded Parsons (PSN [https://seekingalpha.com/symbol/PSN]) to Neutral from Buy. While PSN benefits from a fast-growing infrastructure segment and steady federal growth outside of a key “confidential” contract, Poponak noted that the expiration of that contract “still muddy[s] the growth picture.”

The firm now sees a difficult acceleration ahead in the second half of 2025 and a challenging comparison in fiscal 2026. PSN also “carries the highest valuation multiples in the sector following its sharp rebound from the confidential contract driven lows,” he said.

EARNINGS TAKEAWAYS: AMTM, LDOS, VVX

Among other coverage updates, Amentum Holdings (AMTM [https://seekingalpha.com/symbol/AMTM]), Leidos (LDOS [https://seekingalpha.com/symbol/LDOS]) and V2X (VVX [https://seekingalpha.com/symbol/VVX]) each posted second-quarter results “generally ahead of consensus,” though bookings were uneven amid what Poponak described as a “muted” funding environment.

The administration’s evolving priorities continue to shape spending and contract decisions. Poponak noted that VVX and AMTM “have meaningfully lower margins than the rest of the peer group,” while LDOS faces “earnings concentration risk in Health, where recent bookings have been soft.”

MORE ON CACI INTERNATIONAL

* CACI International Inc 2025 Q4 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4810426-caci-international-inc-2025-q4-results-earnings-call-presentation]
* CACI International Inc (CACI) Q4 2025 Earnings Call Transcript [https://seekingalpha.com/article/4810425-caci-international-inc-caci-q4-2025-earnings-call-transcript]
* CACI International: Defense And Intel Back In Focus As Growth Engines [https://seekingalpha.com/article/4806629-caci-international-defense-and-intel-back-in-focus-as-growth-engines]
* Caci targets over 60% free cash flow per share growth in fiscal 2026 as company advances software-defined strategy [https://seekingalpha.com/news/4481631-caci-targets-over-60-percent-free-cash-flow-per-share-growth-in-fiscal-2026-as-company]
* CACI International Non-GAAP EPS of $26.48 beats by $1.86, revenue of $8.63B beats by $20M [https://seekingalpha.com/news/4480505-caci-international-non-gaap-eps-of-26_48-beats-by-1_86-revenue-of-8_63b-beats-by-20m]