In today's digital age, with cyber threats multiplying, cybersecurity is a must for businesses globally. According to Gartner (IT), global cybersecurity spending is projected to increase 14.3% to $215 billion this year. Longer term, the cybersecurity market is expected to expand at a 9.7% compound annual growth rate to reach $504.5 billion by the decade's end. This underlines how serious corporations have become about protecting themselves and their data against hackers and malicious actors.
Additionally, the White House is pushing for a 10% boost in cybersecurity outlays for the next fiscal year, potentially benefiting contractors like Booz Allen Hamilton Holding Corp (BAH). According to Wells Fargo (WFC), Booz Allen is poised to benefit from the proposed 2% gain in funding for operations and maintenance.
Booz Allen has been ranked among the leading suppliers to the intelligence community, an industry that typically attracts investment regardless of economic fluctuations. Moreover, it has consistently returned value to its shareholders.
About Booz Allen Stock
McLean, Virginia-based Booz Allen Hamilton (BAH) is a management and technology consulting firm that provides digital solutions, including artificial intelligence (AI) and cyber services to clients worldwide.
Valued at $19.2 billion by market cap, shares of Booz Allen have surged by 15.4% on a YTD basis, outperforming the broader S&P 500 Index's ($SPX) 6.3% gains over the same time frame.
Booz Allen has consistently increased its dividend payments for over a decade, showcasing its commitment to shareholders. The company offers an annualized dividend of $1.92 per share, resulting in a dividend yield of 1.30%. In Q3, it distributed $61.7 million through quarterly dividends.
Booz Allen stock trades at 24.73 times forward earnings and 1.88 times sales, higher than the research and consulting services industry median. However, its price/earnings-to-growth (PEG) ratio of 1.96x is below its own five-year average.
Booz Allen Q3 Earnings Beat Wall Street Projections
On Jan. 26, Booz Allen reported a Q3 adjusted net income of $184.3 million, or $1.41 per share, surpassing Wall Street’s expectations by 24.8%. The company’s revenue grew 12.9% year over year to $2.6 billion, marginally beating the Street's forecast.
In April, Booz Allen partnered with Cloudflare, Inc. (NET), the leading connectivity cloud company, to provide immediate cybersecurity threat response to organizations facing distributed denial-of-service (DDoS) and ransomware attacks. Brendan Rooney, Booz Allen's Senior VP of Global Commercial Incident Response, said, "Working together, Cloudflare and Booz Allen will be able to guide organizations under attack to mitigation with protection and expertise when they are needed most."
Management raised its guidance for fiscal 2024, projecting revenue growth between 14% and 15%, while adjusted EBITDA is expected to range between $1.16 billion and $1.18 billion. Its adjusted EPS is expected to be between $5.25 and $5.40, and net cash provided by operating activities is anticipated to range between $200 million and $275 million.
Analysts tracking Booz Allen expect the company’s profit to surge 18.2% year over year to $5.39 in fiscal 2024. Its fiscal 2025 profit is expected to further grow by 8.9% to $5.87 per share.
What Do Analysts Expect for Booz Allen Stock?
Booz Allen stock has a consensus "Moderate Buy" rating. Out of 11 analysts covering BAH, six analysts recommend a "Strong Buy," four advise a "Hold" rating, and one gives a "Strong Sell."
The average analyst price target of $151.60 indicates a relatively modest upside potential of 2.9% from current levels. However, the Street-high price target of $170, maintained by Jefferies earlier this month, suggests that the stock could rally as much as 15.4% from current levels.
On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
