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Will Booz Allen Hamilton (BAH) Deliver a Beat in Q1 Earnings?

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Booz Allen Hamilton Holding Corporation (BAH - Free Report) will report first-quarter fiscal 2020 results on Jul 29, before the bell.

In the fiscal fourth quarter, the company delivered a positive earnings surprise of 4.9%. It has a trailing four quarter average positive surprise of 16.6%.

We observe that the company's shares have gained 50.5% year to date, outperforming the 35.1% rally of the industry it belongs to.

Let's see how things are shaping up for this announcement.

Strong Demand to Drive the Top Line

Booz Allen’s major focus is on revenue excluding billable expenses as it drives most of its profitability. This revenue is expected to witness significant growth in the to-be-reported quarter, driven by continued strength in client demand and contract performance.

Through the implementation of Vision 2020, a sustainable long-term growth strategy, Booz Allen is seeing significantly higher backlog growth, a shift in talent to more technical expertise and strong performance in the global commercial market.

Notably, the Zacks Consensus Estimate for revenues is pegged at $1.78 billion, indicating year-over-year growth of 8.3%.

Booz Allen Hamilton Holding Corporation Revenue (TTM)

Bottom Line to Remain Flat

The consensus estimate for EPS is pegged at 72 cents, indicating no change from the year-ago quarter reported figure. Top-line growth, robust contract level performance and operational excellence are expected to be offset by increase in expenses as a result of investments in facilities, infrastructure and technologies.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Booz Allen has a Zacks Rank #2 and an Earnings ESP of +13.02%.

Other Stocks to Consider

Here are a few other stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these too have the right combination of elements to beat on earnings:

S&P Global (SPGI - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #2.  The company is slated to report results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Clean Harbor (CLH - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank #3. The company is slated to report results on Jul 31.

Green Dot (GDOT - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is slated to release results on Aug 7.

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