Results: Booz Allen Hamilton Holding Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates
Shareholders of Booz Allen Hamilton Holding Corporation (NYSE:BAH) will be pleased this week, given that the stock price is up 11% to US$71.64 following its latest quarterly results. Revenues were US$2.8b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.63 were also better than expected, beating analyst predictions by 16%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Booz Allen Hamilton Holding after the latest results.
Taking into account the latest results, the current consensus from Booz Allen Hamilton Holding's 14 analysts is for revenues of US$11.4b in 2027. This would reflect a credible 2.7% increase on its revenue over the past 12 months. Statutory earnings per share are expected to shrink 7.6% to US$5.93 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$11.4b and earnings per share (EPS) of US$5.92 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Booz Allen Hamilton Holding
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$84.50. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Booz Allen Hamilton Holding at US$140 per share, while the most bearish prices it at US$68.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Booz Allen Hamilton Holding's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 8.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Booz Allen Hamilton Holding is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$84.50, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Booz Allen Hamilton Holding going out to 2029, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Booz Allen Hamilton Holding that you need to take into consideration.
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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.