Here’s Why Booz Allen Hamilton (BAH) Isn’t Just Down in the Broader Market

Booz Allen Hamilton (BAH) closed the most recent trading day at $163.24, indicating a -0.41% move from the end of the previous session. The stock’s performance lagged the S&P 500’s 0.18% drop on the day. Elsewhere, the Dow lost 0.8% and the tech-heavy Nasdaq added 0.27%.

Coming into today, shares of the defense contractor had gained 3.81% over the past month. During that same time, the business services sector gained 4.62%, while the S&P 500 gained 4.46%.

The investment community will be paying close attention to Booz Allen Hamilton’s earnings performance in the upcoming release. The company is scheduled to release its earnings on October 25, 2024. On that day, Booz Allen Hamilton is expected to report earnings of $1.48 per share, which would represent year-over-year growth of 14.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.96 billion, up 10.85% from the year-ago period.

For the full year, Zacks Consensus Estimates are calling for earnings of $5.97 per share and revenue of $11.81 billion, which would represent changes of +8.55% and +10.77%, respectively, from the prior year.

It’s also important to note the recent changes to Booz Allen Hamilton analyst estimates. These changes generally reflect the latest short-term business trends, which may change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to nearby teams’ stock movements. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these rating changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive, outside-audited track record of outperforming expectations, with stocks ranked #1 generating an average annual return of +25%. since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% higher. Booz Allen Hamilton currently has a Zacks Rank #2 (Buy).

In terms of valuation, Booz Allen Hamilton stock is currently trading at a Forward P/E ratio of 27.47. This represents a premium to its industry’s average Forward P/E of 24.53.

Additionally, we can note that BAH currently boasts a PEG ratio of 2.36. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. As of yesterday’s trading close, the Government Services sector had an average PEG ratio of 2.36.

The story continues

The government services industry is part of the business services sector. This industry currently has a Zacks Industry Rank 2, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Be sure to utilize Zacks.com to follow these and other stock performance metrics during the upcoming trading sessions.

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