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Why Should You Hold on to Booz Allen Hamilton (BAH) Stock?
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Booz Allen Hamilton Holding Corporation (BAH - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of its growth.
The company has an expected long-term earnings per share (three to five years) growth rate of 10.6%. Further, earnings are anticipated to register 13.8% growth in fiscal 2020 and 9.6% in fiscal 2021.
Shares of Booz Allen have gained 17.6% in the past year compared with the industry’s 9.6% rally.
What’s Behind the Rally?
Vision 2020, Booz Allen’s transformation strategy aimed at creating sustainable expansion, has been fetching significant headcount and backlog growth. Its implementation has accelerated the company’s organic-revenue growth and strengthened its profitability position. Notably, the company’s adjusted EPS of 93 cents jumped 12% year over year in the last-reported quarter. Revenues, backlog and headcount surged 7.1%, 15.9% and 3.8%, respectively.
Booz Allen is focusing on areas such as artificial intelligence, advanced engineering, directed energy and modern digital platforms to drive innovation. It is developing mechanics and infrastructure for new and disruptive business models to enhance service quality and client satisfaction. Transformative solutions created by such efforts are expected to significantly enhance future revenue opportunities of the company.
Booz Allen has a large addressable market as it serves the U.S. government, one of the world’s largest consumers of technology and management-consulting services. Also, the agencies of the U.S. intelligence community offer an additional market. The company has a lot of opportunities in global commercial markets where it has relatively low penetration.
Some Risks
Booz Allen's total debt to total capital ratio of 0.73 was higher than the industry’s 0.63 at the end of the first quarter of fiscal 2021. A high debt-to-capitalization ratio indicates that the proportion of debt to finance assets is on the rise.
Further, cash and cash equivalent balance of $621 million at the end of quarter was well below the debt level of $2.3 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. The cash level can, however, meet the company’s short-term debt of $128 million.
Zacks Rank and Stocks to Consider
Booz Allen currently carries a Zacks Rank #3 (Hold).
Long-term earnings (three to five years) growth rate for BG Staffing, CoreLogic and Sykes Enterprise is estimated at 20%, 12% and 8%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Why Should You Hold on to Booz Allen Hamilton (BAH) Stock?
Booz Allen Hamilton Holding Corporation (BAH - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of its growth.
The company has an expected long-term earnings per share (three to five years) growth rate of 10.6%. Further, earnings are anticipated to register 13.8% growth in fiscal 2020 and 9.6% in fiscal 2021.
Shares of Booz Allen have gained 17.6% in the past year compared with the industry’s 9.6% rally.
What’s Behind the Rally?
Vision 2020, Booz Allen’s transformation strategy aimed at creating sustainable expansion, has been fetching significant headcount and backlog growth. Its implementation has accelerated the company’s organic-revenue growth and strengthened its profitability position. Notably, the company’s adjusted EPS of 93 cents jumped 12% year over year in the last-reported quarter. Revenues, backlog and headcount surged 7.1%, 15.9% and 3.8%, respectively.
Booz Allen is focusing on areas such as artificial intelligence, advanced engineering, directed energy and modern digital platforms to drive innovation. It is developing mechanics and infrastructure for new and disruptive business models to enhance service quality and client satisfaction. Transformative solutions created by such efforts are expected to significantly enhance future revenue opportunities of the company.
Booz Allen has a large addressable market as it serves the U.S. government, one of the world’s largest consumers of technology and management-consulting services. Also, the agencies of the U.S. intelligence community offer an additional market. The company has a lot of opportunities in global commercial markets where it has relatively low penetration.
Some Risks
Booz Allen's total debt to total capital ratio of 0.73 was higher than the industry’s 0.63 at the end of the first quarter of fiscal 2021. A high debt-to-capitalization ratio indicates that the proportion of debt to finance assets is on the rise.
Further, cash and cash equivalent balance of $621 million at the end of quarter was well below the debt level of $2.3 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. The cash level can, however, meet the company’s short-term debt of $128 million.
Zacks Rank and Stocks to Consider
Booz Allen currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader Zacks Business Services sector are BG Staffing (BGSF - Free Report) , CoreLogic and Sykes Enterprises , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings (three to five years) growth rate for BG Staffing, CoreLogic and Sykes Enterprise is estimated at 20%, 12% and 8%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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