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what it is
Booz Allen sells tech, engineering, and consulting work mostly to U.S. government agencies that keep writing very large checks.
how it gets paid
Last year Booz Allen made $12.0B in revenue. Other U.S. government agencies was the main engine at $9.8B, or 82% of sales.
why it's growing
Revenue grew 12.4% last year. The 36.15% EPS beat mattered because it showed margins held up better than feared.
what just happened
Booz Allen posted $1.77 in EPS, beating the $1.30 estimate by 36.15%, even as revenue pressure kept investors nervous.
At a glance
B+ balance sheet — decent shape, but not bulletproof
100/100 earnings predictability — you can trust these numbers
14.6x trailing p/e — the market's not buying it — or you found a deal
2.8% dividend yield — cash in your pocket every quarter
15.0% return on capital — nothing to write home about
xvary composite: 75/100 — average
What they do
Booz Allen sells tech, engineering, and consulting work mostly to U.S. government agencies that keep writing very large checks.
The moat is trust built over decades. Booz Allen has worked with the U.S. Army and Navy for more than 70 years, and 95% of fiscal 2024 revenue came from government end clients. Switching costs (changing a mission-critical contractor) → painful vendor replacement risk → so what: your customer usually sticks with the incumbent.
How they make money
$12.0B
annual revenue · their business grew +12.4% last year
Department of Veterans Affairs
$1.6B
Other U.S. government agencies
$9.8B
Major corporations
$0.24B
Institutions
$0.12B
Not-for-profit organizations
$0.24B
The products that matter
mission-critical federal work
Defense & Intelligence
$6.8B · 57% of revenue
it's the $6.8B core of the company, and it grew 8.5% last year while weaker segments pulled the other way. this is the engine still working.
57% of revenue
ai and advanced tech services
AI & Advanced Tech
$0.4B · +25.0%
this $0.4B segment is only 3.3% of sales, but it grew 25.0%. small today, important if federal tech budgets hold up.
25.0% growth
civilian agency consulting
Civilian Government
$3.6B · 30% of revenue
this $3.6B segment fell 15.2% last year. when nearly a third of the business shrinks that fast, the rest of the company has to run just to stand still.
-15.2% decline
Key numbers
95%
gov exposure
Customer concentration → one buyer pays the bills → so what: your upside and your risk both run through Washington.
$38.0B
backlog
Backlog → signed work waiting to be done → so what: it is more than 3 times annual revenue of $12.0B.
15.0%
return on capital
Return on capital → profit from each dollar invested → so what: Booz Allen earns better-than-average returns for a contractor.
14.6x
trailing p/e
P/E → price divided by trailing earnings → so what: you are paying 14.6 times earnings for a business with 100 earnings predictability and an outlook rank raised to 1.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $3.9B (27% of capital)
- net profit margin 6.8% — keeps 7 cents of every dollar in revenue
- return on equity 36% — $0.36 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in BAH 3 years ago → it's now worth $9,660.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Booz Allen posted $1.77 in EPS, beating the $1.30 estimate by 36.15%, even as revenue pressure kept investors nervous.
The beat came from stronger profit than expected, but the top line was softer. The most recent quarter showed revenue of $2.62B, down 10.2% vs. prior year, and management later cut fiscal 2026 revenue guidance to $11.3B-$11.5B.
$2.62B
revenue
$1.77
eps
36.15%
surprise
the number that mattered
The 36.15% EPS beat mattered because it showed margins held up better than feared, even while revenue fell 10.2%.
-
it has been a volatile 15-month stretch for booz allen hamilton stock.the selling began right after the election of president donald trump in november of 2024 and then intensified with his inauguration.
-
the investment community was correctly worried that the new department of government efficiency (doge) agency would result in a notable cut in government spending on consulting services and ultimately the amount of business booz allen does with the federal government.that did occur, to some extent, over the course of 2025 and was exacerbated by the nation’s longest government shutdown last october.
-
it had a negative effect on the company’s top-line performance.the stock did rally a bit early last month on a better-than-expected bottom-line showing in the third quarter and comments from the trump administration that defense spending is likely to increase over the next few years. however, selling has since picked up again after the treasury department canceled $21 million in consulting contracts with booz allen, citing failures to adequately protect sensitive taxpayer information.
-
as we went to press, bah shares were down more than 50% since early november, 2024.
-
fiscal 2025 (ends march 31, 2026) has been a challenging year.
source: company earnings report, 2026
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What could go wrong
the #1 risk here is federal consulting cuts showing up beyond the civilian segment.
med
civilian budget pressure
Civilian Government is a $3.6B segment, or 30% of company revenue, and it already fell 15.2%. If that pressure persists, the rest of the portfolio has to offset a very large hole.
30% of the business is in the line of fire. That's not a side issue.
med
single-customer exposure
95% of revenue comes from the U.S. government. That's a moat when contracts flow and a concentration problem when agencies start reprioritizing spend.
When one customer drives 95% of revenue, policy risk is business risk.
med
margin defense has limits
Management held the quarter together with cost cuts, producing a 12% EPS gain despite a 10% revenue drop. That move buys time. It does not replace sales.
At an 11.2% operating margin on $2.6B of quarterly revenue, there is room for discipline, not room for denial.
A $38B backlog helps, but it is not immunity. If defense strength stops offsetting civilian weakness, the stock stays cheap for a reason.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
civilian decline vs. defense growth
Defense & Intelligence grew 8.5%, while Civilian Government fell 15.2%. If that gap narrows the right way, the whole story changes.
trend
backlog conversion
$38.0B of backlog looks comforting. You want to see it turn into revenue, not just sit there making presentations feel safer.
risk
federal contract scrutiny
The recent $21M contract cancellation matters less for size than for signal. Trust issues spread faster than lost revenue.
earnings
next quarter's top line
Another quarter like the last one — revenue down 10% while EPS is saved by cost cuts — would make the bear case much harder to dismiss.
Analyst rankings
short-term outlook
top 5%
outlook rank 1 — the highest rating. in human-speak, analysts still think the stock can recover faster than the recent narrative suggests.
risk profile
average
risk rank 3 — not especially safe, not especially dangerous. That's what happens when a steady contractor runs into a policy shock.
chart momentum
bottom 5%
momentum rank 5 — the chart is still ugly. Analysts may see recovery potential, but the tape is not helping them yet.
earnings predictability
100 / 100
management usually delivers numbers close to expectation. the problem right now is not surprise. it's direction.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 331 buyers vs. 361 sellers in 3q2025. total institutional holdings: 0.1B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$64
$153
$88
current price
$109
target midpoint · +25% from current · 3-5yr high: $185 (+110% · 22% ann'l return)
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