Booz Allen Hamilton reported stronger-than-expected fiscal fourth-quarter earnings on Friday morning, wrapping up a year that saw a big acceleration in growth. BAH stock rose within a buy zone.
The outbreak of multiple wars and the artificial intelligence boom "have led to an inflection in government tech hiring and bookings that we feel has some serious legs," William Blair analyst Louis DiPalma wrote in a February research report.
Meanwhile, Booz Allen "remains the government's go-to source to modernize the military and prepare for conflicts," he wrote. The company "has more backlog than it can handle as government spending has surged on Pacific tensions and AI prototyping."
On Tuesday, Stifel raised its price target for BAH to 170 from 155, keeping a buy rating. The firm noted that "AI, cyber and IT modernization remain in focus for the government." That boded well for BAH results, as do recent budget and supplemental spending packages, Stifel said.
Booz Allen Earnings
Estimates: Wall Street expected Booz Allen Hamilton earnings to rise 22% in fiscal Q4 to $1.23 a share, according to the FactSet consensus. Analysts projected revenue would grow 11.7% vs. a year earlier to $2.72 billion.
Results: Adjusted EPS grew 32% to $1.33, as revenue rose 14% to $2.77 billion.
Booz Allen's backlog dipped to $33.8 billion at the end of Q4 from $34.3 billion in fiscal Q3, but remained above the year-ago level of $31.2 billion.
The company said that headcount rose by about 400 vs. Q3 and 2,300 from a year ago.
Outlook: BAH provided a fiscal 2025 outlook for adjusted EPS to rise to a range of $5.80 to $6.05, with revenue growth of 8% to 11%. Ahead of Q4 results, analysts were forecasting that Booz Allen earnings per share will rise to $5.92 in fiscal 2025. Revenue was forecast to rise about 8% to $11.48 billion.
BAH Stock
Booz Allen stock rose 2.7% to 156.43 in early Friday stock market action, climbing near the top of a buy zone.
BAH vaulted 13.6% to 147.52 after it reported Q3 earnings on Jan. 26. After peaking on March 4, shares etched out a nine-week flat base with a 150.59 buy point.
Additionally, BAH stock first crested the buy point on May 6. After a mild shakeout that saw a test of its 10-week moving average, BAH is still within the buy zone, dipping 0.7% to 152.36 on Thursday. The buy zone runs through 158.12.
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