We came across a bullish thesis on Booz Allen Hamilton Holding Corporation on Caffeinated Memos’s Substack. In this article, we will summarize the bulls’ thesis on BAH. Booz Allen Hamilton Holding Corporation's share was trading at $89.01 as of February 6th. BAH’s trailing and forward P/E were 13.21 and 14.84 respectively according to Yahoo Finance. Helport AI Rises Fast in Southeast Asia BNPL Space via Atome Partnership Booz Allen Hamilton Holding Corporation, a technology company, provides technology s ...

SAN FRANCISCO--(BUSINESS WIRE)--Sverica Capital Management LP ("Sverica†) announced today that its Fund V portfolio company Defy Security, LLC ("Defy†or the "Company†), has entered into a definitive agreement to be sold to Booz Allen Hamilton("Booz Allen†). This marks the culmination of a five-year successful partnership with Defy, during which the Company tripled in size while maintaining its strong profitability profile and solidified its position as a leading provider of end-to-end cybersec. ...

Core Viewpoint - Booz Allen Hamilton Holding Corp. (NYSE:BAH) is identified as an undervalued mid-cap stock with potential for investment, despite limited topline visibility and mixed earnings results [1][2]. Group 1: Price Target Adjustments - UBS raised its price target on Booz Allen to $97 from $93 while maintaining a Neutral rating, noting that earnings are holding up despite limited visibility [1]. - Stifel increased its price target to $115 from $106 with a Hold rating, describing the company's FQ3 results as surprise-free, with revenue missing expectations but earnings beating them [2]. - Truist raised its price target to $98 from $90 with a Hold rating, increasing FY 2027 and FY 2028 EPS estimates due to tax-related benefits and anticipated cost reductions [3]. Group 2: Earnings and Financial Outlook - Booz Allen's earnings are noted to be solid, even with limited topline visibility, indicating resilience in its financial performance [5]. - The company is expected to benefit from projected growth in defense spending and incremental funding, although civil spending may face cuts in the future [3].

Company Overview - Booz Allen Hamilton Holding Corporation (NYSE:BAH) is one of the largest consulting firms globally [2] - The company's shares have decreased by 31% over the past year but have increased by 4% year-to-date [2] Recent Developments - The firm faced a setback when the Treasury Department terminated contracts due to a tax data leak, impacting approximately $4.8 million in annual revenue [2] - Despite this, Booz Allen Hamilton's total annual revenue stands at $11.41 billion, indicating that the lost contracts represent a small fraction of its overall income [2] Analyst Ratings and Price Targets - Truist maintained a Hold rating on Booz Allen Hamilton with a price target of $98 [2] - DA Davidson raised its price target for the stock from $73 to $81 while keeping a Neutral rating, citing increased earnings estimates for 2026 and 2027, now projected at $6.10 and $6.75 respectively [2] Market Commentary - Jim Cramer mentioned Booz Allen Hamilton positively after the firm reported earnings, noting a significant increase in stock price due to market factors [2] - There is a belief that while Booz Allen Hamilton has potential, some AI stocks may offer better returns with lower risk [3]

Core Insights - Booz Allen Hamilton Holding Corp. (BAH) reported mixed third-quarter fiscal 2026 results, with earnings exceeding the Zacks Consensus Estimate while revenues fell short [1] - The stock has declined 8.1% since the results were released on January 23, 2026, primarily due to the revenue miss and weak fiscal 2026 guidance [1] Revenue and Earnings - BAH expects revenues to be between $11.3 billion and $11.4 billion, down from the previous guidance of $11.3 billion to $11.5 billion, with the midpoint below the Zacks Consensus Estimate of $11.38 billion [2] - Revenue growth is projected at 5-6%, while free cash flow is anticipated to be in the range of $825 million to $900 million, revised from $850 million to $950 million [2] - Quarterly adjusted earnings per share (EPS) were reported at $1.77, beating the Zacks Consensus Estimate by 40.5% and increasing 14.2% year-over-year [3] - Total revenues for the quarter were $2.62 billion, missing the consensus estimate by 3.9% and decreasing 10.2% year-over-year [3] Backlog and Book-to-Bill Ratio - Total backlog increased by 1.5% year-over-year to $38 billion, but fell short of the estimate of $42.88 billion [4] - Funded backlog decreased by 9.7% to $4.21 billion, missing expectations, while unfunded backlog rose by 18.7% but was below the estimate [4] - Priced options declined by 2.2% to $24.19 billion, also missing expectations, with a book-to-bill ratio of 0.3 compared to 0.6 in the previous year [5] EBITDA and Margins - Adjusted EBITDA was $285 million, a decrease of 14.2% year-over-year, but exceeded the estimate of $282.6 million [6] - The adjusted EBITDA margin on revenues was 10.9%, down 50 basis points year-over-year [6] Balance Sheet and Cash Flow - BAH ended the quarter with cash and cash equivalents of $882 million, slightly down from $885 million in the previous quarter [7] - Long-term debt decreased by 1.5% to $3.86 billion compared to $3.92 billion at the end of fiscal 2025 [7] - The company generated $801 million in net cash from operating activities, with capital expenditure at $195 million and free cash flow reported at $248 million [7] Fiscal Year 2026 Outlook - BAH expects adjusted diluted EPS to be in the range of $5.95 to $6.15, an increase from the prior guidance of $5.45 to $5.65, with the midpoint above the Zacks Consensus Estimate of $5.69 [8] - Free cash flow is anticipated to remain in the range of $825 million to $900 million [8]

Core Insights - Booz Allen Hamilton (BAH) is expected to benefit from long-term government contracts, which provide steady revenues and reduce exposure to market volatility [2][5] - The company is focusing on improving operational efficiency and expanding investments in cybersecurity and Artificial Intelligence (AI), which are enhancing client relationships and driving long-term growth [2][7] - Despite these strengths, BAH faces challenges from rising operating costs and intense competition in the consulting services industry, which are impacting profitability and scalability [3][10] Financial Performance - In the third quarter of fiscal 2026, BAH reported earnings of $1.77 per share, exceeding the Zacks Consensus Estimate by 40.5% and increasing 14.2% year-over-year [4][12] - Total revenues for the same period were $2.62 billion, which fell short of the consensus estimate by 3.9% and declined 10.3% year-over-year [4][12] Operational Strategy - BAH is leveraging its expertise in management and technology consulting, analytics, engineering, digital solutions, and cybersecurity to serve both government and private sectors globally [5] - The company is committed to cost control and efficient project management, particularly in mission-critical services like cybersecurity and defense consulting, which has improved operational efficiency [6][10] - Investments in digital transformation and data-driven solutions are enhancing client offerings and streamlining internal operations [6] Market Position and Liquidity - BAH's focus on expanding its market potential through investments in cybersecurity and AI is yielding positive results, with growing demand for secure digital solutions [7] - As of September 30, 2025, BAH had cash and equivalents totaling $816 million against a current debt of $83 million, indicating strong liquidity [9] - The company's current ratio of 1.76 is higher than the industry average of 1.19, suggesting it is well-positioned to meet short-term obligations [9] Shareholder Returns - BAH has consistently paid dividends, totaling $268 million in fiscal 2025, and has repurchased shares worth $812 million, reflecting confidence in its business and boosting investor sentiment [8]

Core Viewpoint - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors, while also occasionally analyzing large-cap companies to provide a broader market perspective [1] Group 1 - The research emphasizes the importance of small- to mid-cap companies in investment analysis [1] - Large-cap companies are analyzed to give a fuller sense of the broader equity markets [1]

Core Viewpoint - Booz Allen Hamilton Holding Corp. experienced a significant decline in stock price following the termination of all contracts by the Treasury Department due to a tax information leak involving high-profile individuals [1][2][3]. Group 1: Company Performance - Booz Allen Hamilton's stock fell by 8.12% to close at $93.93 after the announcement from the Treasury Department [1]. - The company had previously enjoyed a three-day winning streak before this decline [1]. - The termination of contracts was linked to inadequate safeguards for sensitive data, including taxpayer information [3]. Group 2: Financial Outlook - For the fiscal year 2026, Booz Allen Hamilton revised its revenue forecast to a range of $11.3 billion to $11.4 billion, down from a previous high-end estimate of $11.5 billion, indicating a year-on-year decline of 5 to 6% [4]. Group 3: Government Action - Treasury Secretary Scott Bessent stated that the cancellation of contracts was a necessary step to enhance public trust in government, following the leak of tax information by a former employee [2]. - The individuals involved in the leak included prominent figures such as President Donald Trump, Elon Musk, and Jeff Bezos [2].

Core Points - The U.S. Treasury Department has canceled all contracts with Booz Allen Hamilton due to failures in protecting sensitive taxpayer data and a past breach that exposed confidential tax information [1][2][3] Group 1: Contract Cancellation - The Treasury Department canceled 31 contracts with Booz Allen, amounting to $4.8 million in annual spending and $21 million in total obligations [2] - This decision is part of a broader initiative by the Trump administration to enhance oversight of government contractors and restore public confidence in federal institutions [2][3] Group 2: Data Breach Incident - The cancellation is linked to a significant IRS data breach involving a former Booz Allen employee, Charles Littlejohn, who leaked confidential tax returns of approximately 406,000 taxpayers [4] - Littlejohn pleaded guilty to felony charges for unauthorized disclosure of confidential tax information and received a five-year prison sentence [4] Group 3: Impact on Booz Allen Hamilton - Booz Allen's Treasury contracts represent a small portion of its projected fiscal year 2025 revenue of $12 billion, with total order backlogs at $38 billion [5] - Following the announcement, Booz Allen's stock dropped by 8.12%, closing at $93.93, despite having a favorable price trend in the short and medium terms [5]

Group 1 - The Trump administration is taking actions against perceived enemies, including Booz Allen, despite the company's contributions to a significant project costing over $400 million [1] - Booz Allen is a major player in the defense and national security technology sector, holding extensive contracts with various government agencies such as the Defense Department and Homeland Security [1] Group 2 - In 2024, a former IRS contractor associated with Booz Allen was sentenced to five years in prison for leaking sensitive tax information related to Trump [2]