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Booz Allen (BAH) Gains From VoLT Strategy, Strong Liquidity

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Booz Allen Hamilton (BAH - Free Report) has had an impressive run over the past year, wherein its shares have gained 45.7%, outperforming the 30.9% rally of the industry it belongs to and the 23.2% rise of the Zacks S&P 500 Composite.

BAH reported better-than-expected fourth-quarter fiscal 2024 results. Quarterly adjusted earnings per share of $1.33 surpassed the Zacks Consensus Estimate by 9% and increased 31.7% from the year-ago quarter. The company reported revenues of $2.77 billion, which beat the consensus estimate by 1.8% and increased 13.9% year over year. Revenues, excluding billable expenses, were $1.93 billion, up 13.7% on a year-over-year basis.

How Is BAH Faring?

Booz Allen developed its solutions business in a manner that creates differentiated business models and sales channels, increases client acquisition, and enhances revenue opportunities in the future. The talent market of the company is differentiated as well. It ensures the attraction and retention of quality talent from diverse disciplines. These initiatives assist BAH to win highly technical, mission-critical work for its federal government business.

BAH’s VoLTstrategy focuses on integrating velocity, leadership and technology in the process of transformation. The velocity front deals with increasing innovation, strengthening market position through mergers, acquisitions and partnerships, and making client-centric decisions. The leadership front involves initiatives to promptly utilize leadership in identifying the requirements of the client and scaling businesses. On the technology front, the company focuses on developing and expanding next-generation technology and solutions.

Artificial intelligence, advanced engineering, directed energy and modern digital platforms are a few of the areas wherein the company is focussing to drive innovation. It is developing mechanics and infrastructure for new and disruptive business models to improve the quality of services and client satisfaction. Transformative solutions created by such efforts are anticipated to significantly enhance the company’s top line.

BAH has a large addressable market as it serves the government, which is one of the world’s largest consumers of technology and management consulting services. Also, the additional market is offered by the agencies of the U.S. intelligence community. Further, global commercial markets provide a huge opportunity for the company, wherein penetration is relatively low.

Booz Allen's current ratio (a measure of liquidity) at the end of fourth-quarter fiscal 2024 was at 1.62, higher than the year-ago quarter’s 1.21. A current ratio of more than 1 often indicates that the company will easily pay off its short-term obligations.

Zacks Rank & Other Stocks to Consider

BAH currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are Western Union (WU - Free Report) and AppLovin (APP - Free Report) .

Western Union sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

WU has a long-term earnings growth expectation of 3.9%. It delivered a trailing four-quarter earnings surprise of 15.7%, on average.

AppLovin currently flaunts a Zacks Rank of 1. It has a long-term earnings growth expectation of 20%.

APP delivered a trailing four-quarter earnings surprise of 60.9%, on average.


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