Booz Allen Hamilton Q4 Earnings Beat Estimates; Revenue Misses

Booz Allen Hamilton Holding Corporation (BAH) reported Q4 adjusted earnings of $0.89 per share, up 21.92% from the year-ago period, and surpassed the Street’s estimates of $0.82 per share. Shares were up 1.9% to close at $83.62 on May 21.

Booz Allen Hamilton Holding Corporation is the parent of Booz Allen Hamilton Inc., an American management and information technology consulting firm offering analytics, digital solutions, engineering, and cyber expertise to public and private sector organizations and non-profits.

Revenue for the quarter came in at $1.98 billion in line with the prior-year period, but missed the Street’s estimates of $2 billion. Excluding billable expenses, revenue stood at $1.38 billion, up 1.47% compared to the prior-year period.

FY21 revenue and adjusted EPS came in at $7.86 billion and $3.90 per share, up 5.36% and 22.64% year-on-year, respectively. Excluding billable expenses, revenue was up 7.1% for the year.

Total backlog was up 15.9% at $24 billion year-over-year and the quarterly book-to-bill ratio stood at 1.38x versus 0.38x. (See Booz Allen Hamilton’s stock analysis on TipRanks)

Horacio Rozanski, President, and CEO said, “Our FY21 performance demonstrates the fundamental strength and resilience of Booz Allen…The continued stellar performance of our people and the unique skills, expertise, and innovation they bring to every opportunity drives our growth and gives us tremendous confidence as we look to the future.”

For the full year 2022, including the planned acquisition of Liberty IT Solutions LLC, the company forecasts revenue growth in the range of 7% to 10%, and projects adjusted EPS in the range of $4.10 to $4.30 per share.

Following the Q4 results, Cowen & Co. analyst Cai Rumohr maintained a Buy rating on the stock with a price target of $93, which implies 11.2% upside potential to current levels.

Commenting on the company’s solid Q4 performance, Rumohr stated, “Q4’s robust book-bill, solid Q2/Q3 order prospects, and alignment with Biden priorities (cyber, health) suggest organic growth of 7-10% going into FY23. These should allow investors to look beyond flattish H1 organic gains. Depending on Q2 bookings vigor, we believe it has potential for upward reset.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 4 Buys versus 2 Holds. The average analyst price target of $95.75 implies 14.5% upside potential to current levels. Shares have increased 9.7% over the past year.

According to TipRanks’ Smart Score system, Booz Allen gets a 6 out of 10, which indicates that the stock is likely to perform in line with market averages.

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