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Booz Allen's (BAH) Stock Up 10.1% Since Q2 Earnings Release

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Booz Allen Hamilton Holding Corporation (BAH - Free Report) reported better-than-expected second-quarter fiscal 2021 results.

The stock gained 10.1% since the earnings release on Oct 30 as the company raised earnings guidance for fiscal 2021. Booz Allen raised adjusted earnings per share guidance to $3.60-$3.75 from $3.40-$3.60 projected earlier. The midpoint ($3.67) of the guidance is below the Zacks Consensus Estimate of $3.73.

Adjusted earnings per share of $1.03 beat the consensus mark by 12% and improved 27.2% on a year-over-year basis. The bottom line benefited from solid top-line growth and strong margin performance.

Revenues, Backlog & Headcount Increase Y/Y

Total revenues of $2.02 billion surpassed the Zacks Consensus Estimate by 2.3% and increased 11% year over year. Revenues, excluding billable expenses, were $1.42 billion, up 9.2% on a year-over-year basis. Billable expenses accounted for 42.6% of revenues.

Total backlog increased 7.4% from the prior-year quarter’s reported figure to $24.6 billion. Funded backlog of $4.5 billion increased 2.3% year over year. Unfunded backlog was up 14.7% to $6.2 billion. Priced options went up 5.3% to $13.9 billion. Book-to-bill ratio was 1.77, down 33.9% year over year. Headcount of 27,638 increased 2.4% year over year.


Operating Results

Adjusted EBITDA amounted to $228.4 million, up 19.2% year over year. Adjusted EBITDA margin on revenues stayed flat year over year at 10.9%. Adjusted EBITDA margin on revenues, excluding billable expenses, increased to 16.1% from 15% in the year-ago quarter.

Balance Sheet & Cash Flow

Booz Allen Hamilton exited fiscal second quarter with cash and cash equivalents of $1,275.2 million compared with $620.6 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.3 billion compared with $2 billion at the end of the previous quarter. The company generated $425.6 million of net cash from operating activities. Capital expenditures were $18 million and free cash flow was $407.6 million for the September-end quarter.

The company paid out dividends worth $43 million and repurchased shares worth $30.4 million in the reported quarter.

Revised Fiscal 2021 Outlook

The company’s revenue-growth projection is now at 7-9% range (previous projection: 6-10%). Adjusted EBITDA margin on revenues is anticipated in the low to mid 10% range (previous projection: 10%). Operating cash flow is expected in the range of $600-$650 million (previous projection: $550-$600 million).

Booz Allen Hamilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and rising 26.4% on a year-over-year basis. The reported figure exceeded the company’s guidance of $1.30-$1.40.

The Interpublic Group of Companies (IPG - Free Report) reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and rose 8.2% on a year-over-year basis.

IQVIA Holdings (IQV - Free Report) reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and inched up 1.9% on a year-over-year basis. The reported figure was above the company’s guidance of $1.47-$1.55.

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