Assessing Booz Allen Hamilton’s Valuation After Its Addition to the S&P 1000 Index

Booz Allen Hamilton Holding (BAH) just secured a spot in the S&P 1000, a move that can quietly change the stock’s demand profile as index trackers and small cap managers adjust their allocations.

See our latest analysis for Booz Allen Hamilton Holding.

The S&P 1000 inclusion comes after a choppy stretch, with the share price at $85.15 and a roughly 5 percent 1 month share price return, but a weaker year to date share price return alongside a negative 1 year total shareholder return. This suggests momentum is only just starting to stabilise after earlier pressure from CFO transition headlines and softer sentiment.

If this move has you rethinking where the next wave of demand could show up, it is worth scanning aerospace and defense stocks for other defense exposed names riding similar structural spending trends.

Yet with the shares still down sharply year to date, trading below analyst targets despite steady revenue growth, investors now have to decide: Is Booz Allen mispriced or already reflecting its next leg of earnings growth?

Most Popular Narrative Narrative: 16.1% Undervalued

With Booz Allen Hamilton Holding last closing at $85.15 against a narrative fair value of $101.50, the valuation case leans toward meaningful upside and sets up a deeper story about future earnings power.

Expanding outcome-based and fixed-price contracting, especially for proprietary software and tech-enabled offerings like Thunderdome, could improve margins and increase earnings by enabling Booz Allen to deliver higher-value solutions with greater efficiency.

Read the complete narrative.

Want to see what powers that upside case? The narrative leans on shifting contract mix, resilient defense demand, and a future earnings multiple usually reserved for faster growers. Curious which specific revenue and margin assumptions make that premium look achievable, and how sensitive the valuation is to even small changes in those inputs? Read on to uncover the full playbook behind this fair value.

Result: Fair Value of $101.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent federal funding delays and tougher fixed price contracts could squeeze margins, unsettle backlog conversion, and challenge the current undervaluation thesis.

Find out about the key risks to this Booz Allen Hamilton Holding narrative.

Build Your Own Booz Allen Hamilton Holding Narrative

If you see the story differently or want to stress test the numbers yourself, you can build a custom view in minutes with Do it your way.

A great starting point for your Booz Allen Hamilton Holding research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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