Booz Allen Hamilton’s stock price has taken a beating over the past six months, shedding 27.3% of its value and falling to $125.08 per share. This may have investors wondering how to approach the situation.
Following the pullback, is now an opportune time to buy BAH? Find out in our full research report, it’s free.
Why Are We Positive On BAH?
With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE: BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.
1. Core Business Firing on All Cylinders
We can better understand Government & Technical Consulting companies by analyzing their organic revenue. This metric gives visibility into Booz Allen Hamilton’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Booz Allen Hamilton’s organic revenue averaged 13.2% year-on-year growth. This performance was fantastic and shows it can expand quickly without relying on expensive (and risky) acquisitions. 
2. Economies of Scale Give It Negotiating Leverage with Suppliers
With $11.78 billion in revenue over the past 12 months, Booz Allen Hamilton is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.
3. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Booz Allen Hamilton’s EPS grew at a spectacular 14.5% compounded annual growth rate over the last five years, higher than its 10.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons why Booz Allen Hamilton ranks highly on our list. With the recent decline, the stock trades at 18.2× forward P/E (or $125.08 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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