Booz Allen Hamilton Posts Q4 Beat & Issues Muted Guidance

Booz Allen Hamilton (NYSE: BAH) reported stronger-than-expected fiscal Q4 results, topping both earnings and revenue estimates.

Despite the beat, shares of the company dropped 2.5% on May 20 to close at $78.84, after the company provided FY2023 EPS guidance below the street’s expectations.

Based in the U.S., Booz Allen Hamilton Holding Corporation is the parent company of the management and technology consulting and engineering services firm Booz Allen Hamilton Inc.

Q4 Beat

Q4 adjusted earnings of $0.86 per share were a cent ahead of analysts’ expectations of $0.85 per share. The company reported earnings of $0.89 per share for the prior-year period.

Revenues jumped 13.1% year-over-year to $2.24 billion and exceeded consensus estimates of $2.21 billion.

Notably, the total backlog increased by 21.7% to $29.2 billion and the quarterly book-to-bill ratio came in at 1.66x compared to 1.38x at the end of the prior-year quarter.

FY2023 Outlook

Looking ahead, management provided financial guidance for FY2023.

The company now forecasts adjusted earnings in the range of $4.15 to $4.45 per share, while the consensus estimate is pegged at $4.56 per share. Revenues are forecast to grow in the range of 5.0% to 9.0%.

CEO’s Comments

Booz Allen Hamilton CEO, Horacio Rozanski, commented, “Our strong fiscal year 2022 performance in a dynamic environment demonstrates the power of Booz Allen’s operational excellence, critical mission delivery, and exceptional people.”

He further added, “One year into VoLT, we are focused on continued growth at the intersection of mission and technology innovation.”

Wall Street’s Take

Following the Q4 results, CFRA decreased the price target on Booz Allen Hamilton to $86 from $91 (9.1% upside potential) and reiterated a Buy rating.

Overall, the stock has a Strong Buy consensus rating based on 12 Buys and 1 Hold. The average Booz Allen price target of $96.25 implies 22.08% upside potential from current levels.

TipRanks’ Smart Score

BAH scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

Conclusion

Despite well-known industry headwinds faced by government contractors, Booz Allen Hamilton reported an earnings beat.

However, the company provided FY2023 outlook below analyst’s expectations. Meanwhile, investors will await for ramp-up in defense procurement by the government, that may boost the share price performance.

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