A month has gone by since the last earnings report for Booz Allen Hamilton (BAH Quick QuoteBAH - Free Report) . Shares have lost about 19.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Booz Allen due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Booz Allen Surpasses Q3 Earnings Estimates, Revenues Lag

Booz Allen Hamilton reported mixed third-quarter fiscal 2021 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Quarterly adjusted earnings per share of $1.04 beat the consensus mark by 13% and improved 30% 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 $1.9 billion lagged the Zacks Consensus Estimate by 4.7% but increased 3% year over year. Revenues, excluding billable expenses, were $1.33 billion, increasing 6.2% on a year-over-year basis. Billable expenses accounted for 30.3% of revenues.

Total backlog increased 6.1% from the prior-year quarter’s reported figure to $23.3 billion. Funded backlog of $3.6 billion increased 2.8% year over year. Unfunded backlog was up 12.5% to $6 billion. Priced options went up 4.3% to $13.7 billion. Book-to-bill ratio was 0.32, down 33.3% year over year. Headcount of 27,566 increased 1.5% year over year.

Operating Results

Adjusted EBITDA amounted to $205.4 million, up 7.7% year over year. Adjusted EBITDA margin on revenues was 10.8%, up from the year-ago figure of 10.3%. Adjusted EBITDA margin on revenues, excluding billable expenses, increased to 15.5% from 15.3% in the year-ago quarter.

Balance Sheet & Cash Flow

Booz Allen Hamilton exited the quarter with cash and cash equivalents of $1.34 billion compared with $1.28 billion at the end of the prior quarter. Long-term debt (net of current portion) was $2.3 billion, flat with the prior-quarter figure. The company generated $232.9 million of net cash from operating activities. Capital expenditure was $15.9 million and free cash flow was $217 million.

The company paid out dividends worth $43 million and repurchased shares worth $27 million in the reported quarter.

Revised Fiscal 2021 Outlook

Adjusted EPS is anticipated to be in the range of $3.7-$3.85 compared with the previous guidance of $3.6-3.75. The company’s revenue-growth projection is now at 4.8-6% range compared with the previous projection of 7-9%. Adjusted EBITDA margin on revenues is anticipated to be in mid-to-high 10% range compared with low-to-mid 10% range projected previously. Operating cash flow is expected in the range of $625-$675 million while the previous projection was $600-$650 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -5.76% due to these changes.

VGM Scores

At this time, Booz Allen has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Booz Allen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.