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Is Booz Allen Hamilton (BAH) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Booz Allen Hamilton (BAH - Free Report) . BAH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We also note that BAH holds a PEG ratio of 1.28. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BAH's PEG compares to its industry's average PEG of 1.50. Within the past year, BAH's PEG has been as high as 2.29 and as low as 1.26, with a median of 1.65.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BAH has a P/S ratio of 1.14. This compares to its industry's average P/S of 1.15.

Finally, our model also underscores that BAH has a P/CF ratio of 17.33. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BAH's P/CF compares to its industry's average P/CF of 19.72. Over the past year, BAH's P/CF has been as high as 18.49 and as low as 14.67, with a median of 16.41.

These are only a few of the key metrics included in Booz Allen Hamilton's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BAH looks like an impressive value stock at the moment.


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