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Why Booz Allen (BAH) Shares Gained 18% in the Past Year?

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Shares of Booz Allen Hamilton Holding Corporation (BAH - Free Report) have rallied 18% in the past year, primarily on Vision 2020 and a large addressable market.

Zacks Investment Research
Image Source: Zacks Investment Research

Reasons for Upside

Booz Allen has a large addressable market as it serves the US 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. Further, BAH has a lot of opportunities in global commercial markets where it has relatively low penetration.

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

BAH is focussing on areas, such as artificial intelligence, advanced engineering, directed energy and modern digital platforms to drive innovation. Booz Allen 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 enrich future revenue opportunities for Booz Allen.

Favorable Estimate Revision  

Driven by the above tailwinds, the Zacks Consensus Estimate for current-year earnings has moved marginally north to $4.36 in the past 60 days.  

Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .

Avis Budget sports a Zacks Rank #1 (Strong Buy) at present. CAR has an earnings growth rate of 108.4% for 2022.

Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.

Genpact carries a Zacks Rank #2 (Buy) at present. G has a long-term earnings growth expectation of 12.3%.

Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.

CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.
 

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