Booz Allen (BAH) AI Stock Analysis

• Market Cap: $10.80B
• Dividend Yield: 2.6%
• Average Volume (3M): 2.73M
• Price to Earnings (P/E): 13.3
• Beta (1Y): 0.53
• Revenue Growth: 2.42%
• EPS Growth: 3.05%
• Country: US
• Employees: 35,900
• Sector: Industrials
• Sector Strength: 72
• Industry: Consulting Services
• EPS (TTM): 1.77
• Shares Outstanding: 120,594,390
• 10 Day Avg. Volume: 3,060,651
• 30 Day Avg. Volume: 2,730,618
• PEG Ratio: 0.25
• Price to Book (P/B): 13.32
• Price to Sales (P/S): 1.12
• P/FCF Ratio: 14.67
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 1.72
• Enterprise Value/Ebitda: 9.12
• 1Y Price Target: $101.29
• Price Target Upside: 11.19% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $104.00 ▲(14.16% Upside)

BAH scores well on financial quality—especially reliable free-cash-flow conversion and solid margins—while valuation is reasonable with a supportive dividend. The earnings call reinforced margin resilience, cost reductions, and strong backlog/pipeline, but the score is held back by leverage concerns and near-term revenue/bookings softness. Technicals are mildly positive short-to-medium term but still below the 200-day trend.

Positive Factors

Cash Generation

BAH converts a high share of earnings into free cash flow and reported ~14% FCF growth TTM. Durable FCF conversion supports recurring dividends, buybacks, and strategic investments (productization, AI/cyber), providing a cash buffer against contract timing and funding cycles.

Backlog and Pipeline

A >$38B backlog and a nearly $53B qualified pipeline (+12% YoY) provide multi-year revenue visibility typical in federal consulting. This structural backlog supports capacity planning, steady revenue conversion over time, and cushions near-term booking volatility tied to appropriations timing.

Strategic Partnerships & Productization

The a16z technology-acceleration partnership and up-to-$400M commitment accelerate commercial tech co-creation for government missions. This structurally strengthens BAH's productized offerings and AI/cyber differentiation, diversifying revenue beyond time-and-materials consulting.

Negative Factors

High Leverage

Annual balance sheets show debt around 3–4x equity, elevating financial risk. Persistent leverage limits flexibility for large contract investments, M&A, or weathering revenue dips, increasing refinancing and interest-rate sensitivity and amplifying downside if margins or bookings weaken.

Demand & Booking Weakness

Q3 revenue fell ~10% YoY (≈‑6% ex-shutdown), civil down ~28%, and quarterly book-to-bill only 0.3x, indicating slow funding. Prolonged weak bookings and large civil exposure risk extended underutilization, pressured revenue recovery, and persistent margin/timing volatility across multiple quarters.

Contract & Reputational Risk

A reported cancellation of all Treasury contracts is a structural reputational and compliance risk. Losing an agency relationship and attendant obligations can reduce near-term revenues, invite broader agency scrutiny, and raise compliance or rebid costs, affecting long-term federal contracting dynamics.

Booz Allen Business Overview & Revenue Model

Company Description

Booz Allen Hamilton Holding Corporation provides management and technology consulting, analytics, engineering, digital solutions, mission operations, and cyber services to governments, corporations, and not-for-profit organizations in the United States and internationally. The company offers consulting solutions for various domains, business strategies, human capital, and operations. It also provides analytics services, which focuses on delivering transformational solutions in the areas of artificial intelligence, such as machine learning and deep learning; data science, such as data engineering and predictive modeling; automation and decision analytics; and quantum computing. In addition, the company designs, develops, and implements solutions built on contemporary methodologies and modern architectures; delivers engineering services and solutions to define, develop, implement, sustain, and modernize complex physical systems; and provides cyber risk management solutions, such as prevention, detection, and cost effectiveness. Booz Allen Hamilton Holding Corporation was founded in 1914 and is headquartered in McLean, Virginia.

How the Company Makes Money

Booz Allen generates revenue primarily through the provision of consulting services to government and commercial clients. The company's revenue model is largely based on time and materials contracts, fixed-price contracts, and cost-plus contracts, where they charge clients for the actual cost of services plus a fee. Key revenue streams include government contracts, particularly in the defense and intelligence sectors, which comprise a significant portion of their business. Additionally, Booz Allen earns revenue from providing technology solutions and products, leveraging its expertise in analytics and cyber security. Strategic partnerships with technology firms and government agencies also contribute to its earnings, enabling Booz Allen to expand its service offerings and enhance its competitive position in the market.

Booz Allen Financial Statement Overview

Summary

Overall fundamentals are solid, led by strong cash generation (free cash flow consistently near earnings and up ~14% TTM) and healthy consulting margins (TTM gross margin ~53%, operating profitability ~9–10%). Offsetting this, revenue is slightly down in the TTM period (-2.5%), and balance-sheet risk is elevated due to high leverage in the annual statements (roughly 3–4x debt-to-equity), limiting flexibility if demand softens.

Income Statement

BAH shows solid profitability for a consulting business, with TTM (Trailing-Twelve-Months) gross margin around 53% and operating profitability near 9–10%. Revenue has expanded well over the last several years (from ~$7.9B in FY2021 to ~$12.0B in FY2025), but the TTM (Trailing-Twelve-Months) period shows a modest revenue decline (-2.5%), suggesting near-term demand softness or contract timing. Net margin has improved meaningfully versus FY2023 (about 7% TTM vs ~3% in FY2023), though it remains moderate and somewhat variable year-to-year.

Balance Sheet

Leverage looks elevated on the annual balance sheets, with debt running roughly 3–4x equity in FY2022–FY2025, which increases financial risk and reduces flexibility if earnings weaken. Total equity is relatively small versus the asset base, and returns on equity are very high, partly reflecting that higher leverage. The TTM (Trailing-Twelve-Months) snapshot shows much lower debt-to-equity, but it conflicts sharply with the annual trend, so overall balance-sheet strength reads as only average with leverage as the key watch item.

Cash Flow

Cash generation is a strength. Free cash flow is consistently close to reported earnings (around 0.87–0.92x across FY2021–FY2025 and ~0.92x in TTM (Trailing-Twelve-Months)), supporting earnings quality. Free cash flow is also growing in the most recent periods (TTM (Trailing-Twelve-Months) up ~14%), and operating cash flow remains robust. A weakness is that operating cash flow has covered a relatively modest share of debt in the provided figures, implying refinancing/repayment capacity is good but not exceptional if leverage stays high.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.98B	10.66B	9.26B	8.36B	7.86B
Gross Profit	6.56B	5.74B	4.95B	4.46B	4.20B
EBITDA	1.57B	1.20B	650.17M	819.99M	803.07M
Net Income	935.00M	605.71M	271.79M	466.74M	608.96M
Balance Sheet
Total Assets	7.31B	6.56B	6.55B	6.03B	5.50B
Cash, Cash Equivalents and Short-Term Investments	885.00M	554.00M	404.86M	695.91M	990.96M
Total Debt	4.22B	3.64B	3.06B	3.10B	2.67B
Total Liabilities	6.31B	5.52B	5.56B	4.98B	4.43B
Stockholders Equity	1.00B	1.05B	992.00M	1.05B	1.07B
Cash Flow
Free Cash Flow	911.00M	192.14M	526.69M	656.56M	631.47M
Operating Cash Flow	1.01B	258.84M	602.82M	736.53M	718.68M
Investing Cash Flow	-218.00M	-90.64M	-468.02M	-867.73M	-158.28M
Financing Cash Flow	-460.00M	-19.00M	-425.85M	-163.85M	-311.35M

Booz Allen Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 91.10
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAH, the sentiment is Negative. The current price of 91.1 is below the 20-day moving average (MA) of 92.95, above the 50-day MA of 88.46, and below the 200-day MA of 100.77, indicating a neutral trend. The MACD of 1.52 indicates Positive momentum. The RSI at 48.17 is Neutral, neither overbought nor oversold. The STOCH value of 12.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BAH.

Booz Allen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRAI	78 Outperform	$1.27B	23.21	27.83%	0.97%	8.69%	34.58%
FCN	76 Outperform	$5.65B	22.79	13.30%	―	-0.95%	-10.54%
HURN	75 Outperform	$2.93B	28.36	21.20%	―	12.50%	29.40%
ICFI	74 Outperform	$1.72B	17.62	9.88%	0.65%	-3.81%	-7.05%
BAH	71 Outperform	$10.80B	13.31	74.53%	2.60%	2.42%	3.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RGP	52 Neutral	$145.40M	-1.05	-61.44%	6.74%	-10.83%	-1669.11%

Booz Allen Corporate Events

Booz Allen Reports Q3 Results, Raises Fiscal 2026 EPS Guidance

On January 23, 2026, Booz Allen Hamilton reported third-quarter fiscal 2026 results showing revenue of $2.6 billion, down 10.2% year over year (approximately 6% excluding the impact of the U.S. government shutdown), but with improved profitability metrics, including a 7.0% increase in net income to $200 million and a 14.2% rise in adjusted diluted EPS to $1.77. The company highlighted a record third-quarter backlog of $38 billion and strengthening demand across its civil and national security portfolios, alongside robust free cash flow of $248 million and continued capital deployment, including repurchasing 1.1% of its outstanding shares. For the fiscal year to date, revenue declined 6.3% to $8.4 billion and adjusted EBITDA fell 7.8%, while free cash flow rose modestly to $739 million, and the board declared a regular quarterly dividend of $0.59 per share payable on March 2, 2026. Booz Allen also updated its fiscal 2026 guidance, narrowing its revenue outlook to $11.3–$11.4 billion, maintaining mid-10% adjusted EBITDA margins, and raising its adjusted EPS range to $5.95–$6.15, signaling confidence in its ability to execute its growth strategy and sustain shareholder returns despite near-term revenue pressure.

The most recent analyst rating on (BAH) stock is a Hold with a $105.00 price target. To see the full list of analyst forecasts on Booz Allen stock, see the BAH Stock Forecast page.

Booz Allen CFO Matthew Calderone Resigns

On December 11, 2025, Booz Allen Hamilton announced the resignation of Matthew A. Calderone, Executive Vice President and Chief Financial Officer, effective February 1, 2026, as he pursues an opportunity outside the industry. The company has begun searching for a new CFO, with Kristine Martin Anderson, Executive Vice President and Chief Operating Officer, stepping in as interim CFO until a permanent replacement is found.

The most recent analyst rating on (BAH) stock is a Hold with a $93.00 price target. To see the full list of analyst forecasts on Booz Allen stock, see the BAH Stock Forecast page.