Booz Allen Hamilton (NYSE: $BAH) is an American information technology consulting firm that offers services to governments and the private sector. Based in McClean, Virginia, it is a key player in advancing the US government’s critical defense, civil, and national security objectives.
On Friday, May 24, 2024, Booz Allen Hamilton released its Q4 and full-year fiscal 2024 results, beating earnings and revenue estimates.
Booz Allen Hamilton’s Stellar Q4 Results
In the fourth quarter, Booz Allen Hamilton reported revenue of $2.8 billion, a 13.9% Y/Y increase, beating estimates of $2.72 billion. Q4 adjusted EPS came in at $1.33, representing a 31.7% Y/Y increase, above estimates of $1.23.
The company’s backlog came in at $33.8 billion at the end of Q4, slightly below the $34.3 billion in Q3 but above the $31.2 billion reported in Q423.
Other Financial Highlights
Booz Allen Hamilton saw a 287.2% Y/Y increase in net income in Q4 to $128 million, while adjusted EBITDA increased 23.9% Y/Y to $287 million. The Adjusted EBITDA margin came in at 10.3%, compared to 9.5% the previous year.
Its adjusted net income rose 28.8% Y/Y to $172 million, while the net cash from operations dipped 39.4% Y/Y to $144 million.
Booz Allen Hamilton Full Year Results
For the full year, revenue rose 15.2% to $10.7 billion, while net income increased 123.3% to $606 million. It reported a full-year adjusted EBITDA of $1.180 billion, a 15.9% Y/Y increase.
The FY24 adjusted EBITDA margin remained flat Y/Y at 11%, while the FY24 adjusted EPS rose 20.6% Y/Y to $5.50. It ended the year with $259 million in net cash from operations, a 57.1% Y/Y decline.
Capital Allocation
In fiscal 2025, Booz Allen Hamilton deployed around $691.7 million in capital allocation through various channels. It paid out $253.4 million in quarterly dividends, $415 million in share buybacks, and $23.3 million in strategic investments.
For the fourth quarter, the company authorized a $0.51 dividend per share. It also announced an expansion of the share buyback program by $545 million to around $3 billion, with around $1 billion now available for share buybacks.
Fiscal 2025 Guidance
For fiscal 2025, Booz Allen Hamilton expects revenue to grow 8.0% – 11.0% Y/Y. it expects an adjusted EBITDA of $1.26 billion to $1.3 billion, and an adjusted EBITDA margin of around 11%.
The adjusted EPS is expected to come in at $5.80 to $6.05, while the total cash from operations is forecast at $825 million to $925 million.
AI Boom Drives Growth for Booz Allen Hamilton
The AI boom and the outbreak of multiple conflicts have led to an increase in tech hirings and bookings. According to Louis DiPalma, a William Blair analyst, the company “remains the government’s go-to source to modernize the military and prepare for conflicts.” DiPalma noted that Booz Allen had “more backlog than it can handle as government spending has surged on Pacific tensions and AI prototyping.”
On Tuesday, May 21, investment bank Stifel raised its price target for BAH shares to $170 from $155. In a note, the bank stated that “AI, cyber, and IT modernization remain in focus for the government,” which is great for Booz Allen’s future.
BAH Stock Performance
Following the stellar Q4 results, Booz Allen Hamilton (BAH) rose 2.85% during the morning trading session to $156.70 as of 10:17 AM EDT. Year-to-date, BAH is up 19.52%, and in the past 52 weeks, it has gained 66.22%, significantly above the SPX gain of 28.43%.
It is trading above the 50 and 200 DMA of $147.50 and $132,06, and after the Q4 results, it is trading at a new 52-week high, surpassing its previous one of $156.83.
Analysts’ Outlook on BAH
Three stock analysts give BAH an overall moderate buy rating. They forecast a wide range for the stock, with a high of $180 and a low of $135. Their average price target of $161.67 is a 6.11% upside based on the last closing price.
IS Booz Allen Hamilton a Good Investment?
Booz Allen Hamilton’s lucrative position as a top vendor for government agencies during times of peace and conflict means that it is slated for continued growth amid the rise in AI. For investors looking to gain exposure to defense stocks, BAH could potentially be a great option.
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