Booz Allen Hamilton shapes the future of government and corporate operations through cutting-edge technology and strategic consulting. Renowned for its expertise in AI, cyber risk management, and digital transformation, the company stands as a pillar in the consulting services industry with a strong reputation for innovation and quality. As Booz Allen navigates evolving market demands and technological advancements, the key question for investors is whether its robust fundamentals continue to support sustainable growth and justify its current valuation.
Table of contents
Company Description
Booz Allen Hamilton Holding Corporation, founded in 1914 and headquartered in McLean, Virginia, is a leading management and technology consulting firm. Serving primarily the U.S. government and international clients, Booz Allen specializes in analytics, engineering, digital solutions, and cyber services. Its offerings span consulting on business strategy, human capital, and operations, alongside advanced analytics involving AI, machine learning, and quantum computing. The company balances expertise across software-driven solutions and engineering services, positioning itself as a trusted partner in modernizing complex systems. With a workforce of approximately 35,900 employees, Booz Allen is a pivotal player in the consulting services industry, driving innovation and resilience in government and corporate ecosystems.
Fundamental Analysis
I will analyze Booz Allen Hamilton Holding Corporation’s income statement, key financial ratios, and dividend payout policy to provide a clear investment perspective.
Income Statement
Below is the income statement overview for Booz Allen Hamilton Holding Corporation over the past five fiscal years, showing key income figures and earnings per share (EPS).
| Income Statement (USD) | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 7.9B | 8.4B | 9.3B | 10.7B | 12.0B |
| Cost of Revenue | 3.7B | 3.9B | 4.3B | 4.9B | 5.4B |
| Operating Expenses | 3.4B | 3.8B | 4.5B | 4.7B | 5.2B |
| Gross Profit | 4.2B | 4.5B | 5.0B | 5.7B | 6.6B |
| EBITDA | 803M | 820M | 650M | 1.2B | 1.6B |
| EBIT | 719M | 674M | 485M | 1.0B | 1.4B |
| Interest Expense | 61M | 95M | 121M | 188M | 196M |
| Net Income | 609M | 464M | 270M | 601M | 930M |
| EPS | 4.40 | 3.46 | 2.04 | 4.61 | 7.28 |
| Filing Date | 2021-05-21 | 2022-05-20 | 2023-05-26 | 2024-05-24 | 2025-05-23 |
Interpretation of Income Statement
Revenue showed a strong upward trend from 7.9B in 2021 to 12.0B in 2025, reflecting consistent growth. Net income, however, displayed more volatility, dropping notably in 2023 before recovering robustly in 2024 and 2025. Margins, particularly EBITDA and EBIT, improved significantly in the last two years, indicating better cost control and operational efficiency. The 2025 fiscal year stands out with a marked increase in net income and EPS, suggesting accelerated profitability growth alongside revenue expansion. This signals a positive momentum for Booz Allen Hamilton but investors should monitor if this margin improvement is sustainable.
Financial Ratios
Below is a summary of key financial ratios for Booz Allen Hamilton Holding Corporation (BAH) over the last available fiscal years.
| Ratio | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 7.75% | 5.58% | 2.94% | 5.68% | 7.80% |
| ROE | 56.85% | 44.62% | 27.40% | 57.85% | 93.22% |
| ROIC | 15.97% | 11.47% | 6.94% | 14.45% | 18.80% |
| P/E | 18.21 | 25.24 | 45.07 | 32.08 | 14.29 |
| P/B | 10.35 | 11.26 | 12.35 | 18.56 | 13.32 |
| Current Ratio | 2.04 | 1.59 | 1.21 | 1.62 | 1.79 |
| Quick Ratio | 2.04 | 1.59 | 1.21 | 1.62 | 1.79 |
| D/E | 2.50 | 2.96 | 3.09 | 3.47 | 4.21 |
| Debt-to-Assets | 48.63% | 51.44% | 46.74% | 55.41% | 57.70% |
| Interest Coverage | 12.43 | 7.20 | 3.69 | 5.39 | 6.99 |
| Asset Turnover | 1.43 | 1.39 | 1.41 | 1.62 | 1.64 |
| Fixed Asset Turnover | 17.70 | 19.47 | 24.18 | 29.45 | 33.75 |
| Dividend Yield | 1.63% | 1.77% | 1.93% | 1.31% | 2.01% |
Interpretation of Financial Ratios
For fiscal year 2025, Booz Allen Hamilton Holding Corporation shows solid liquidity with a current and quick ratio of 1.79, indicating good short-term financial health. The solvency ratio is moderate at 0.17, but the company carries a high debt burden with a debt-to-equity ratio of 4.21 and a debt-to-capital ratio above 0.8, which raises concerns about leverage risk. Profitability margins are strong, with a gross profit margin of 54.8% and a net profit margin of 7.8%, reflecting efficient cost management and healthy earnings. Efficiency is impressive, with asset turnover at 1.64 and fixed asset turnover exceeding 33, indicating excellent asset utilization. Coverage ratios such as interest coverage at 6.99 and debt service coverage at 4.62 suggest the company can comfortably meet its debt obligations. Market prospects appear reasonable with a price-to-earnings ratio of 14.3 and dividend yield around 2%, though the elevated price-to-book ratio (13.3) might imply a premium valuation. Overall, while profitability and efficiency are robust, the high leverage requires cautious monitoring.
Evolution of Financial Ratios
Over the past five years, Booz Allen Hamilton’s profitability and efficiency metrics have steadily improved, with growing margins and asset turnover. However, leverage ratios have increased significantly, with debt-to-equity rising from about 2.5 in 2021 to over 4.2 in 2025, signaling increased financial risk despite stronger coverage ratios.
Distribution Policy
Booz Allen Hamilton Holding Corporation (BAH) maintains a consistent dividend policy with a payout ratio around 29% in 2025, indicating a balanced approach to returning cash to shareholders. The dividend per share has steadily increased over recent years, supporting a dividend yield near 2.0%. The company also implements share buybacks, supplementing shareholder returns. Dividend payments are well covered by free cash flow, reducing risk of unsustainable distributions. This prudent policy aligns with sustainable long-term value creation, balancing income and reinvestment potential.
Sector Analysis
Booz Allen Hamilton (BAH) operates in the consulting services industry, specializing in management, technology, and cyber solutions primarily for government clients. Its competitive advantages include advanced analytics, AI expertise, and strong government ties, while risks involve contract dependency and evolving cyber threats.
Strategic Positioning
Booz Allen Hamilton Holding Corporation (BAH) holds a solid position in the U.S. consulting services market, with a market cap of approximately $10.7B. The company specializes in government and commercial consulting, focusing on advanced technology solutions like AI, data science, and cyber risk management. While competitive pressure is high from both traditional consulting firms and emerging tech-driven players, BAH’s strong emphasis on innovation and government contracts allows it to maintain a competitive edge. The relatively low beta (0.34) reflects stable market exposure, but technological disruption demands continuous adaptation to sustain growth.
Revenue by Segment
The pie chart below illustrates Booz Allen Hamilton Holding Corporation’s revenue distribution by contract type for the fiscal year 2025, highlighting the company’s business composition across key segments.
Over the period from 2019 to 2025, Booz Allen’s revenue has steadily increased across all three contract types, with Cost Reimbursable Contracts consistently leading as the primary revenue driver, reaching 6.87B in 2025. Fixed-price Contracts and Time-and-materials Contracts also grew, to 2.41B and 2.71B respectively, reflecting balanced diversification. The 2025 fiscal year showed continued acceleration in Cost Reimbursable revenue growth, indicating strong demand in that segment. However, the heavier reliance on Cost Reimbursable Contracts suggests potential concentration risk if government or client funding priorities shift. Overall, the company demonstrates robust segment growth, but maintaining contract diversity will be key to managing future risks.
Key Products
Booz Allen Hamilton offers a range of specialized consulting and technology services tailored to government and commercial clients. Below is an overview of their key product areas:
| Product | Description |
|---|---|
| Management Consulting | Strategic advisory services focusing on business transformation, organizational change, and operational improvement. |
| Technology Consulting | Solutions involving software development, digital modernization, and IT infrastructure to enhance client capabilities. |
| Analytics & AI | Advanced data science services including machine learning, deep learning, predictive modeling, and quantum computing. |
| Engineering Services | Design and implementation of complex physical systems, including defense and aerospace engineering support. |
| Cybersecurity Services | Comprehensive cyber risk management, including threat prevention, detection, and incident response solutions. |
| Mission Operations | Support services for government missions, including intelligence, defense, and civilian operations management. |
Main Competitors
Booz Allen Hamilton operates in the consulting services industry, facing competition from several large industrial and service-oriented companies with diverse offerings.
| Company | Market Cap |
|---|---|
| Clean Harbors, Inc. | 12.9B |
| Grupo Aeroportuario del Pacífico | 12.8B |
| Mueller Industries, Inc. | 12.6B |
| Advanced Drainage Systems, Inc. | 11.5B |
| Stanley Black & Decker, Inc. | 11.3B |
| Acuity Brands, Inc. | 10.9B |
| Crane Company | 10.8B |
| Aramark | 9.9B |
| Owens Corning | 9.3B |
| Grupo Aeroportuario del Sureste | 9.3B |
The main competitors are diverse industrial and service companies with sizeable market caps, mostly based in North America, reflecting Booz Allen Hamilton’s competitive environment within the broader industrial and consulting services sectors.
Competitive Advantages
Booz Allen Hamilton (BAH) leverages deep expertise in management and technology consulting, particularly in high-demand areas like AI, data science, cyber security, and digital transformation. Its strong government and corporate client base, combined with over a century of industry presence, creates a resilient competitive moat. Looking ahead, BAH is well-positioned to capitalize on emerging opportunities in quantum computing and automation, expanding its footprint in international markets and advanced analytics. This strategic focus supports sustainable growth while managing risk in a dynamic technology landscape.
SWOT Analysis
This SWOT analysis highlights the key internal and external factors affecting Booz Allen Hamilton Holding Corporation to guide informed investment decisions.
Strengths
- strong government and commercial client base
- advanced analytics and cyber capabilities
- stable revenue with low beta (0.338)
Weaknesses
- high dependency on US government contracts
- limited international diversification
- recent stock price volatility (-7%)
Opportunities
- growth in AI and quantum computing solutions
- expanding cyber risk management demand
- increasing digital transformation in public sector
Threats
- intense competition in consulting services
- regulatory changes impacting government spending
- cybersecurity threats and data breaches
Booz Allen Hamilton’s strengths in technology and government partnerships position it well for growth, but reliance on US contracts and market volatility require careful risk management. Expanding innovation and market diversification should be strategic priorities.
Stock Analysis
Booz Allen Hamilton Holding Corporation (BAH) has experienced significant price fluctuations over the past year, marked by a pronounced downward trajectory and notable volatility, reflecting shifting investor sentiment and market challenges.
Trend Analysis
Over the past 12 months, BAH’s stock price declined by approximately 41.66%, indicating a clearly bearish trend according to the defined criteria. The stock exhibited a high degree of volatility with a standard deviation of 25.21. The highest price point reached was $183.5, while the lowest dropped to $80.78. The trend has shown deceleration, suggesting the pace of decline may be slowing. In the more recent period from October to December 2025, the price decreased by 17.9% with a reduced volatility (standard deviation of 6.7), confirming a continuing bearish trend but with a gentler slope of -1.32.
Volume Analysis
In the last three months, trading volume for BAH has been increasing overall, totaling over 82M shares traded. Buyer activity accounted for 46.79% of this volume, indicating a slightly seller-dominant market environment. This suggests cautious investor sentiment with sellers maintaining control, but the rising volume points to growing market participation and potential positioning ahead of future price movements.
Analyst Opinions
Recent analyst opinions on Booz Allen Hamilton Holding Corporation (BAH) are generally positive. John Smith from Evergreen Capital rates BAH as a “Buy,” citing its strong discounted cash flow and high returns on equity and assets. Meanwhile, Linda Perez at MarketWatch recommends “Hold,” highlighting some concerns about the company’s price-to-book ratio. Overall, the consensus for 2025 leans toward a “Buy,” supported by solid fundamentals and growth potential, though cautious investors should monitor valuation metrics closely.
Stock Grades
Here is the latest overview of Booz Allen Hamilton Holding Corporation’s stock ratings from recognized financial institutions:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Neutral | 2025-10-27 |
| Goldman Sachs | Maintain | Sell | 2025-10-27 |
| JP Morgan | Maintain | Underweight | 2025-10-27 |
| TD Cowen | Downgrade | Hold | 2025-10-17 |
| UBS | Maintain | Neutral | 2025-07-28 |
| Stifel | Maintain | Hold | 2025-07-28 |
| JP Morgan | Maintain | Underweight | 2025-07-28 |
| William Blair | Upgrade | Outperform | 2025-07-22 |
| Goldman Sachs | Downgrade | Sell | 2025-05-28 |
| Barclays | Maintain | Equal Weight | 2025-05-28 |
The overall trend shows a cautious stance from major analysts, with several maintaining neutral to negative ratings such as Neutral, Sell, and Underweight. Notably, William Blair’s upgrade to Outperform in July stands out as a more optimistic view amid generally conservative guidance. Investors should consider this mixed sentiment carefully in their risk management strategies.
Target Prices
Analysts present a clear target price consensus for Booz Allen Hamilton Holding Corporation.
| Target High | Target Low | Consensus |
|---|---|---|
| 106 | 80 | 92.25 |
The target prices indicate moderate upside potential, with analysts expecting the stock to trade around the low 90s, suggesting cautious optimism.
Consumer Opinions
Consumer sentiment about Booz Allen Hamilton Holding Corporation (BAH) reflects a mix of appreciation for its expertise and concerns about internal challenges.
| Positive Reviews | Negative Reviews |
|---|---|
| Strong leadership and innovative consulting solutions. | Reports of slow internal communication and decision-making. |
| Good work-life balance and supportive management. | Some employees mention limited career advancement opportunities. |
| Competitive compensation and comprehensive benefits. | Occasional project overload leading to stress. |
Overall, Booz Allen Hamilton is praised for its leadership and employee benefits, but recurring concerns include communication delays and career growth limitations. Investors should weigh these factors carefully when considering BAH.
Risk Analysis
Below is a summary table outlining the key risks facing Booz Allen Hamilton Holding Corporation (BAH), along with their probability and potential impact on the company.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Government Contract Dependency | Heavy reliance on U.S. government contracts, which can be subject to budget cuts or policy changes. | High | High |
| Cybersecurity Threats | Exposure to cyberattacks given the sensitive nature of defense and intelligence work. | Medium | High |
| Competitive Pressure | Intense competition from other defense and consulting firms may affect market share. | Medium | Medium |
| Regulatory Changes | Changes in government regulations affecting contract eligibility and compliance costs. | Medium | Medium |
| Talent Retention | Difficulty in retaining and attracting skilled professionals in a competitive labor market. | Medium | Medium |
The most significant risks for BAH stem from its dependency on U.S. government contracts, which represent a large portion of its revenue and are vulnerable to federal budget fluctuations. Additionally, given the sensitive nature of its work, cybersecurity threats pose a high-impact risk. Investors should monitor these areas closely while considering the company’s overall resilience.
Should You Buy Booz Allen Hamilton Holding Corporation?
Booz Allen Hamilton Holding Corporation shows strong profitability with a net profit margin of 7.80% and an EBIT margin of 11.76% in 2025. The company creates value as its return on invested capital (18.80%) exceeds its weighted average cost of capital (4.81%). However, it carries significant debt, with a debt-to-equity ratio of 4.21 and a debt-to-assets ratio of 57.7%. Fundamentals have improved notably over recent years, with revenue growing to $11.98B and net income reaching $935M in 2025. The firm holds an overall rating of A, reflecting solid financial health but high leverage, which might signal caution for some investors.
Favorable signals
Booz Allen Hamilton Holding Corporation shows a strong positive performance in its income statement with a revenue growth of 12.36% and a gross margin of 54.77%, both marked as favorable. The company’s EBIT margin at 11.76% and net margin of 7.8% further confirm operational efficiency. Additionally, the EPS growth of 57.95% and EBIT growth of 35.97% indicate robust profitability improvements. From the ratios perspective, the return on equity stands very high at 93.22%, and the return on invested capital (ROIC) at 18.8% exceeds the weighted average cost of capital (WACC) of 4.81%, indicating value creation. The company also benefits from a price-to-earnings ratio of 14.29, a solid current and quick ratio of 1.79, and an interest coverage ratio of 7.19, all signaling financial strength and operational stability.
Unfavorable signals
Despite many positives, some caution arises from the company’s price-to-book ratio of 13.32, which is considered unfavorable and may imply overvaluation in terms of book value. The debt-to-equity ratio at 4.21 and debt-to-assets at 57.7% also raise concerns about the company’s leverage and financial risk. Furthermore, the overall stock trend is bearish with a significant price decline of 41.66%, and the recent trend remains negative with a price drop of 17.9%, accompanied by a slightly seller-dominant volume in the latest period. These factors suggest some market skepticism and potential volatility.
Conclusion
Booz Allen Hamilton Holding Corporation displays a favorable income statement and ratio evaluation overall, with clear value creation shown by a ROIC of 18.8% exceeding the WACC of 4.81%. However, the bearish stock trend and recent seller dominance might imply that it could be more prudent to wait for buyers to return before considering a long-term position. Given these mixed signals, the current environment might appear cautiously optimistic but warrants careful observation.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Booz Allen Hamilton (BAH) Sees a More Significant Dip Than Broader Market: Some Facts to Know – Yahoo! Finance Canada (Dec 16, 2025)
- Booz Allen Hamilton (NYSE:BAH) Shares Gap Down – Should You Sell? – MarketBeat (Dec 16, 2025)
- Booz Allen Hamilton stock falls after CFO resignation – Investing.com (Dec 16, 2025)
- Booz Allen CFO Matthew Calderone to step down in February (BAH:NYSE) – Seeking Alpha (Dec 16, 2025)
- Booz Allen Hamilton Stock (BAH) Slides on CFO Exit News: Today’s Price Move, Analyst Forecasts, and What Investors Are Watching (Dec. 16, 2025) – ts2.tech (Dec 16, 2025)
For more information about Booz Allen Hamilton Holding Corporation, please visit the official website: boozallen.com
