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Reasons to Retain Booz Allen Hamilton (BAH) in Your Portfolio

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Booz Allen Hamilton Holding Corporation’s (BAH - Free Report) shares have gained 14.8% over the past month, outperforming the 8.3% growth of the industry it belongs to.

BAH has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.

The company has an expected long-term (three to five years) EPS growth rate of 7.5%. Its earnings for fiscal 2022 and 2023 are anticipated to grow 6.9% and 8.1%, respectively, year over year.

Factors that Bode Well

Booz Allen Hamilton developed its solutions business in a way that it creates differentiated business models and sales channels, increases client acquisition, and enhances future revenue opportunities. The company also differentiates itself in the talent market to ensure attraction and retention of quality talent from diverse disciplines. These initiatives bumped up 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 sustainable growth for the company.

The company 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, which is 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. Further, the company has a lot of opportunities in global commercial markets where it has relatively low penetration.

Debt Woe Stays

Booz Allen's cash and cash equivalent balance of $643 million at the end of third-quarter fiscal 2022 was well below the long-term debt level of $2.8 billion. The cash level can, however, meet the short-term debt of $68 million.

Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) , NV5 Global (NVEE - Free Report) and Clean Harbors (CLH - Free Report) .

Cross Country Healthcare sports a Zacks Rank #1 (Strong Buy). The company has a long-term earnings growth of 6.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 41.5%, on average. CCRN’s shares have surged 67.2% in the past year.

NV5 Global also carries a Zacks Rank #1. The company has an expected earnings growth rate of 6.1% for the current year. It delivered a trailing four-quarter earnings surprise of 22.2%, on average.

NV5 Global’s shares have surged 38% in the past year. The company has a long-term earnings growth of 14.2%.

Clean Harbors carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 43.2%, on average.

CLH’s shares have jumped 20.8% in the past year.

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