Yahoo Finance Reasons to Hold Booz Allen (BAH) Stock in Your Portfolio Now
Booz Allen Hamilton Holding Corporation BAH is benefiting from its large addressable market as well as Vision 2020.
The company has an expected long-term (three to five years) EPS growth rate of 8.9%. Its earnings for fiscal 2023 and fiscal 2024 are anticipated to grow 5.9% and 9.2%, respectively, year over year. Shares of BAH have surged 14.4% in the past year compared with 15.4% growth of the industry it belongs to.
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Factors That Bode Well
Vision 2020 was Booz Allen’s transformation strategy for creating sustainable expansion. The strategy focused on getting closer to clients’ core missions, increasing the technical content of work, attracting and retaining talent from diverse areas of expertise, increasing innovation, creating a wide network of external partners and alliances, and expanding into commercial and international business.
Its implementation has accelerated the company’s organic revenue growth, strengthened its profitability position, and fetched significant headcount and backlog growth.
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 differentiated itself in the talent market so as 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.
Some Risks
Booz Allen's current ratio (a measure of liquidity) at the end of third-quarter fiscal 2023 was at 1.44, lower than the prior-year quarter’s 1.69. Decreasing current ratio does not bode well as it indicates that the company may have problem meeting its short-term debt obligations.
Also, Booz Allen has more long-term debt outstanding than cash. Cash and cash equivalent balance at the end of third-quarter fiscal 2023 was $371 million compared with the long-term debt level of $2.8 billion.
Zacks Rank and Stocks to Consider
Booz Allen currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. CAR and ICF International, Inc. ICFI.
Avis Budget currently carries a Zacks Rank #2 (Buy). CAR has 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. You can see the complete list of today’s Zacks #1 Rank stocks here.
CAR delivered a trailing four-quarter earnings surprise of 78%, on average.
ICF International carries a Zacks Rank #2 at present. ICFI’s 2023 revenues and earnings are expected to have surged 10.4% and 3.6% year over year, respectively.
ICF International delivered a trailing four-quarter earnings surprise of 9.2%, on average.
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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report
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