US stock futures steady after Wall St soars on dovish Powell; Nvidia earnings due
Investing.com - Cantor Fitzgerald has reiterated an Overweight rating and $160.00 price target on Booz Allen Hamilton (NYSE:BAH), while elevating the stock to "Top Pick" status in the government technology sector. Currently trading at $108.85, BAH maintains a modest P/E ratio of 15.06 and shows strong fundamentals, according to InvestingPro data.
The firm cited potential free cash flow per share growth acceleration as the primary driver for the designation, despite planning to reduce estimates ahead of the company’s July 25 earnings report. Supporting this view, InvestingPro analysis shows a healthy free cash flow yield of 7% and impressive revenue growth of 12.36%. Cantor Fitzgerald noted that BAH’s current valuation reflects an underappreciation of growth potential, similar to the setup observed in June 2018.
The research firm acknowledged BAH’s approximately 20% underperformance versus the S&P since its February initiation, which contrasts with the 20-30% outperformance of other Overweight-rated government technology companies. Despite this underperformance, Cantor Fitzgerald maintains that double-digit free cash flow per share growth provides a straightforward investment thesis.
Cantor Fitzgerald suggested that government technology services businesses typically outperform in the latter stages of defense budget growth cycles, estimated around fiscal years 2027-2029. The firm maintained its $160 price target but indicated that applying previous peak multiples to fiscal year 2028 projections could suggest a potential $200-300 stock price.
The firm attributed recent sentiment volatility to efficiency environment headlines but expects investors to focus on multi-year budget acceleration, projected to reach $1.3 trillion by fiscal year 2028, particularly given a slowing cyclical backdrop. With an "GREAT" Financial Health Score and trading below its Fair Value according to InvestingPro analysis, BAH presents an interesting opportunity for investors looking to capitalize on government technology sector growth. Get access to 8 more exclusive ProTips and comprehensive analysis in the Pro Research Report.
In other recent news, Booz Allen Hamilton reported revenue of $12.0 billion for the twelve months ending March 31, 2025. The company has been awarded a $96 million contract by the Military Sealift Command for wireless network installation and sustainment services, with work expected to be completed by June 2027. Booz Allen Ventures, the corporate venture capital arm of Booz Allen Hamilton, has made a strategic investment in Corsha, a cybersecurity firm, to enhance machine-to-machine communication security. In addition, Booz Allen Hamilton has appointed Ambassador Robert C. O’Brien to its Board of Directors, bringing his extensive national security expertise to the company. Meanwhile, Melody Barnes, a current board member, has announced she will retire from her position in July 2025. In the realm of stock analysis, Goldman Sachs has downgraded Booz Allen Hamilton from Neutral to Sell, citing expectations of limited revenue and earnings growth. This downgrade reflects concerns about federal civilian spending and Department of Defense priorities, potentially affecting the company’s revenue and profit margins. The developments are part of Booz Allen Hamilton’s ongoing strategic and operational activities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.