Booz Allen Hamilton Holding Corporation BAH is a government services industry stock that has performed well in the past year. Going forward, the stock holds the potential to sustain the momentum. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s check out what makes Booz Allen an attractive pick.
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of Booz Allen have returned 15.2% in the past year compared with the industry’s growth of 8.4%.
Solid Rank & VGM Score: Booz Allen has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment.
Northward Estimate Revisions: One estimate for 2021 moved north in the past 60 days versus no downward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2021 inched up 0.3%.
Solid Growth Prospects: The Zacks Consensus Estimate for 2021 earnings of $3.74 indicates year-over-year growth of 17.6%. Earnings are expected to increase 10.8% year over year in 2022.
Positive Earnings Surprise History: Booz Allen has an impressive earnings surprise history. The company outpaced the consensus mark in all the trailing four quarters, delivering an earnings surprise of 7.1%, on average.
Growth Factors: Booz Allen is focusing on areas such as AI, 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 enhance future revenue opportunities.
The company has developed its solutions business in a way that it creates differentiated business models and sales channels, increases client acquisition and enhances revenue opportunities. The company also differentiates itself in the talent market so as to attract and retain quality talent from diverse disciplines. These initiatives have enhanced its ability to bring a variety of offerings, which have helped it win highly technical, mission-critical work for federal government business. All these ensure long-term growth.
Vision 2020, Booz Allen’s transformation strategy aimed at creating sustainable expansion, is fetching significant headcount and backlog growth. Its implementation boosted the company’s organic revenue growth and strengthened its profitability position.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are ManpowerGroup MAN, Huron Consulting HURN and NV5 Global NVEE, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Huron Consulting and NV5 Global is 3.5%, 14% and 16.8%, respectively.
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