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

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Booz Allen Hamilton (BAH - Free Report) is a stock many investors are watching right now. BAH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

BAH is also sporting a PEG ratio of 1.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BAH's PEG compares to its industry's average PEG of 1.25. BAH's PEG has been as high as 2.28 and as low as 1.14, with a median of 1.61, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 0.97. This compares to its industry's average P/S of 1.

Finally, our model also underscores that BAH has a P/CF ratio of 15.56. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.81. 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 16.37.

Value investors will likely look at more than just these metrics, but the above data helps show that Booz Allen Hamilton is likely undervalued currently. And when considering the strength of its earnings outlook, BAH sticks out at as one of the market's strongest value stocks.




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