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VoLT Strategy Drives Booz Allen's Success Amid Rising Expenses

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The Booz Allen Hamilton (BAH - Free Report) stock has had an impressive run year to date. The stock has gained 23.6%, outperforming 22.2% growth of the industry it belongs to and the 19.6% rise of the Zacks S&P 500 composite.

BAH reported mixed first-quarter fiscal 2025 (ended Jun 30, 2024) results. Quarterly adjusted earnings per share of $1.4 missed the Zacks Consensus Estimate by 9.2% and decreased 6.1% from the year-ago quarter. The company reported revenues of $2.9 billion, which beat the consensus estimate marginally and increased 10.8% on a year-over-year basis. Revenues, excluding billable expenses, were $2 billion, up 8.4% year over year.

How is Booz Allen Doing?

BAH’s VoLT strategy aims at integrating velocity, leadership and technology in the path to transformation. On the velocity front, emphasis is given to increasing innovation, strengthening market position through M&As and partnerships, and client-centric decision-making. The leadership front is mainly concerned with identifying client requirements and scaling businesses with swift leadership. On the technology front, BAH’s paramount concern is to focus on developing and expanding next-generation technology and solutions.

Booz Allen developed its solutions business in a manner that creates differentiated business models and sales channels, boosts client acquisition, and improves the opportunity to generate revenues. Differentiation is achieved in the talent market sphere to ensure the attraction and retention of quality talent from diverse disciplines.

The aforementioned initiatives boost BAH's ability to bring a variety of offerings through which it has been winning highly technical, mission-critical work for its federal government business. Initiatives as such ensure the company’s long-term sustainable growth.

BAH caters to a large addressable market as it serves the government, one of the world’s largest consumers of technology and management consulting services. Also, the agencies of the U.S. intelligence community expand its existing market. Global commercial markets, wherein the company’s penetration is relatively low, provide significant opportunities.

Booz Allen's current ratio (a measure of liquidity) at the end of first-quarter fiscal 2025 was at 1.56, higher than the year-ago quarter’s 1.21. A current ratio of more than 1 often suggests that the company will easily pay off its short-term obligations.

Meanwhile, BAH witnessed increasing operating expenses and costs. These operating expenses and costs increased 9.5% year over year in fiscal 2024, 14.8% in fiscal 2023, and 8.1% in fiscal 2022. A sequential increment in this metric may hurt the BAH’s bottom line.

Zacks Rank & Stocks to Consider

Booz Allen currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Charles River Associates (CRAI - Free Report) and Genpact (G - Free Report) .

Charles River Associates flaunts a Zacks Rank of 1 (Strong Buy) at present. It has a long-term earnings growth expectation of 16%. You can see the complete list of today’s Zacks #1 Rank stocks here.

CRAI delivered a trailing four-quarter earnings surprise of 23.5%, on average.

Genpact carries a Zacks Rank of 2 (Buy) at present. It has a long-term earnings growth expectation of 8.4%.

G delivered a trailing four-quarter earnings surprise of 6.9%, on average.


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