Booz Allen Up 7.9% Thanks to Strong Q2 Earnings

Booz Allen Hamilton Holding Corporation (BAH) delivered robust second-quarter earnings driven by solid growth across all key metrics. Shares of the company, surged 7.9% on the news, closing at $86.86 on October 29.

Booz Allen Hamilton Inc., a unit of BAH, provides management and technology consulting services to the military, government, and business organizations. With a market cap of 11.74 billion, BAH’s shares have gained 7% over the past year. (See Insiders’ Hot Stocks on TipRanks)

The company reported adjusted earnings of $1.26 per share, up 22.3% year-over-year, significantly outpacing analyst estimates of $1.07 per share.

Furthermore, revenue came in at $2.11 billion, a 4.3% increase year-over-year, but marginally falling short of Street estimates of $2.12 billion.

Additionally, BAH’s quarter-end backlog grew 18% year-over-year to $29 billion and the book-to-bill ratio stood at 2.03x. The company’s period-end total headcount was 5.8% higher than Q2 2021.

Happy with the company’s quarterly performance, Horacio Rozanski, President and CEO of Booz Allen, said, “Booz Allen is focused on velocity, leadership, and technology as we continue to help clients transform their most critical missions. Our strong second-quarter performance creates momentum that will allow us to accelerate through the rest of this fiscal year and beyond. The team delivered solid revenue growth, excellent bottom-line results, and strong progress on hiring that positions us for continued success.”

Based on the continued business momentum, Booz Allen reaffirmed its fiscal year 2022 revenue guidance. Moreover, FY 2022 adjusted earnings per share (EPS) is expected to fall in the range of $4.10-$4.30 per share, while the consensus estimate is pegged at $4.21 per share.

Impressed with BAH’s results, Cowen & Co. analyst Cai Rumohr lifted the price target on the stock to $105 (21% upside potential) from $100 while maintaining a Buy rating.  

Rumohr said, “Strong Q2:22 results plus healthy bookings and hiring suggest that BAH is getting back on track as a top defense IT growth story. We expect accelerating organic sales gains in Q3 & Q4 to restore investor confidence in the stock.”

Overall, the stock commands a Strong Buy consensus rating based on 5 Buys and 1 Hold. The average Booz Allen Hamilton price target of $98.67 implies 13.4% upside potential to current levels.

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