A Fresh Look at Booz Allen Hamilton’s Valuation Following Lowered Guidance and New Cost-Cutting Plans

Booz Allen Hamilton, a key player in government consulting, saw its stock slide after reporting quarterly results that fell short of expectations. The company lowered its sales and profit guidance for the year, reflecting continued challenges in its Civil business.

See our latest analysis for Booz Allen Hamilton Holding.

It has been a tough stretch for Booz Allen Hamilton shareholders, with the share price falling 33% year-to-date and delivering a stark 1-year total shareholder return of -52.7%. Even with buybacks, fresh AI initiatives, and a steady dividend, recent momentum remains negative as the market digests lowered guidance and ongoing challenges in the Civil segment. In the long term, gains made over the past five years are looking less impressive, but the company’s pivot toward high-growth national security and AI-driven opportunities could help shape a turnaround if execution improves.

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With shares trading at a significant discount to historical highs and well below analyst price targets, is Booz Allen Hamilton now an undervalued turnaround story? Or are ongoing challenges fully reflected in today’s price?

Most Popular Narrative: 31.1% Undervalued

Analysts’ consensus puts Booz Allen Hamilton’s fair value at $124.20, which stands well above its recent close of $85.56. This gap is at the heart of the narrative that sees significant upside, if current assumptions hold true.

Expanding outcome-based contracts and tech-enabled offerings is likely to boost margins, create new high-value revenue streams, and support efficiency gains. Heavy dependence on government contracts, changing procurement trends, competition, and technology adoption pose ongoing risks to revenue stability, profitability, and long-term growth.

Read the complete narrative.

Curious how this narrative justifies such an ambitious fair value? There is a bold call embedded in these numbers, rooted in major assumptions about revenue, contracting mix, and future profit multiples. Uncover the specific financial leaps that drive this projection and see if you agree with the logic.

Result: Fair Value of $124.20 (UNDERVALUED)

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

However, persistent delays in government funding and Booz Allen’s heavy reliance on federal contracts could derail any sustained turnaround for the stock.

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 unfolding differently or want to examine the numbers on your own terms, you can shape your own perspective in just a few minutes, and 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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