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Booz Allen (BAH) Stock Up 17.9% Year to Date: Here's Why

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Shares of Booz Allen Hamilton Holding Corporation (BAH - Free Report) have gained 17.9% so far this year, outperforming 7.1% growth of the industry it belongs to.

 

Let’s delve into the factors that have contributed to the company’s price performance.

Consecutive Earnings & Revenue Beat

Booz Allen came up with better-than-expected earnings and revenue performance in five of the past six quarters. While the company’s bottom line benefited from top-line growth, strong contract-level performance and operational management, revenues were aided by sustained demand for the company’s services and solutions, and rise in headcount to meet that demand.

Vision 2020 Bodes Well

Vision 2020, Booz Allen’s transformation strategy aimed at creating sustainable expansion, has been fetching significant headcount and backlog growth. The strategy focuses on getting closer to clients’ core missions, increasing technical content of work, attracting and retaining talent from diverse areas of expertise, increasing innovation, creating a wide network of external partners and alliances, and expansion into commercial and international business. 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 rose 7.1%, 15.9% and 3.8%, respectively.

Differentiated Business Model

Booz Allen has developed its solutions business in a way that it creates differentiated business models and sales channels, increases client acquisition and enhances revenue opportunities. The company also differentiated itself in the talent market so as to ensure attraction and to retain quality talent from diverse disciplines. These initiatives have enhanced its ability to bring a variety of offerings through which it has been winning highly technical, mission-critical work for its federal-government business. All these ensure long-term growth.

Zacks Rank and Stocks to Consider

Booz Allen Hamilton currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are FactSet Research (FDS - Free Report) , IQVIA Holdings (IQV - Free Report) and ICF International (ICFI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected-earnings per share (three to five years) growth rate for FactSet Research, IQVIA Holdings and ICF International is 8.5%, 9.8% and 10%, respectively.

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