3 Reasons Investors Love Booz Allen Hamilton (BAH)

Shareholders of Booz Allen Hamilton would probably like to forget the past six months even happened. The stock dropped 23% and now trades at $105. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Following the drawdown, is this a buying opportunity for BAH? Find out in our full research report, it’s free.

Why Are We Positive On Booz Allen Hamilton?

With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE:BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Booz Allen Hamilton’s 9.9% annualized revenue growth over the last five years was impressive. Its growth beat the average business services company and shows its offerings resonate with customers.

2. Core Business Firing on All Cylinders

We can better understand Government & Technical Consulting companies by analyzing their organic revenue. This metric gives visibility into Booz Allen Hamilton’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Booz Allen Hamilton’s organic revenue averaged 13% year-on-year growth. This performance was impressive and shows it can expand quickly without relying on expensive (and risky) acquisitions.

3. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Booz Allen Hamilton’s EPS grew at an astounding 16.3% compounded annual growth rate over the last five years, higher than its 9.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Final Judgment

These are just a few reasons Booz Allen Hamilton is a high-quality business worth owning. After the recent drawdown, the stock trades at 15.2× forward P/E (or $105 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

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