Booz Allen Hamilton is Monday's IBD 50 Growth Stocks To Watch pick as the stock sits in a buy zone of a flat base. The artificial intelligence company serves the U.S. military.
The company boasts that it's the largest provider of artificial intelligence services to the U.S. government, using AI technologies and machine learning.
The 110-year-old company serves the U.S. Air Force, Army, Marine Corps, Navy and Space Force and U.S. intelligence agencies. In addition, Booz Allen provides services to health care, financial and energy government agencies.
The company received 98% of its fiscal 2024 revenue from U.S. government contracts.
"We believe that the U.S. government is the world's largest consumer of management consulting and technology services," the company said in its 10-K SEC filing.
"As we report the company's best performance since going public, our VoLT strategy continues to create outstanding value for our employees, clients, and investors," said Horacio Rozanski, president and CEO, in the fiscal fourth-quarter earnings release.
BAH's VoLT stands for velocity, leadership and technology in the process of transformation.
The company ranks No. 2 out of 30 stocks in the consulting services industry group. The group moved up to No. 38 from No. 51 four weeks ago.
AI Defense Stock Holds In Buy Zone
The AI stock broke out of a flat base with a 150.59 buy point on May 6. Shares have traded sideways and remained mostly in the 5% buy zone, which reaches to 158.12, according to MarketSurge pattern recognition.
Shares gapped up 4% and reached a record high on May 24, after the company topped fiscal fourth-quarter adjusted earnings and sales estimates. The AI stock found support at its 50-day moving average, which helped keep it in the buy zone.
Profit And Sales Forecasts Show Steady Growth
The company's March-ended quarter's profit grew 32% for a second straight quarter. Sales increased 13% and 14% in the same periods. In the latest quarter, it reported an 8.4% increase in total backlog to $33.8 billion.
The company guided for fiscal 2025 adjusted earnings-per-share to rise to a range of $5.80 to $6.05, with revenue growth of 8% to 11%.
FactSet forecasts call for 4% earnings growth in its fiscal first-quarter then 21% and 5% in the following two quarters. Sales growth is projected in the 10% to 11% range over the next four quarters. Full-year fiscal 2025 earnings per share estimates show 10% growth then 11% in fiscal 2026.
The company holds a 4 out of 99 Earnings Stability factor, where lower numbers mean more stability. Booz Allen Hamilton stock holds a 96 out of 99 IBD Composite and Earnings Per Share Ratings.
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