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Investing.com - William Blair upgraded Booz Allen Hamilton (NYSE:BAH) from Market Perform to Outperform on Tuesday, citing improved visibility despite recent challenges in the defense tech services sector. The company, currently trading at $109.32 with a market cap of $13.58 billion, shows strong fundamentals with an InvestingPro Financial Health Score of "GREAT."
The upgrade comes after a challenging six-month period for the defense tech services specialist, during which the Department of Defense indicated intentions to terminate consulting contracts, leading to reduced contract run-rates for the company. Despite these challenges, BAH maintains solid financials with a P/E ratio of 15.06 and impressive revenue growth of 12.36% over the last twelve months.
William Blair’s proprietary "Dotted Line tracker" now suggests improved visibility for Booz Allen Hamilton, despite ongoing uncertainty in the sector. The firm views this as an opportunity for investors to acquire shares of an established company at a discount compared to soaring valuations across the defense tech sector.
The research firm expressed confidence in Booz Allen Hamilton’s ability to navigate the political landscape, noting the company has been operational since 1914 and pioneered the industry.
William Blair projects more than 20% upside potential for Booz Allen Hamilton shares over the next year, and believes the company will "regain its footing under the current administration."
In other recent news, Booz Allen Hamilton reported revenue of $12.0 billion for the 12 months ending March 31, 2025. The company has significantly increased its venture capital commitment from $100 million to $300 million, aiming to invest in early-stage technology companies focused on U.S. government missions. Booz Allen Ventures, the company’s venture arm, recently invested in Corsha, a cybersecurity firm enhancing machine-to-machine communication security. Additionally, Booz Allen secured a $96 million contract from the Navy for wireless network installation and sustainment services, with work expected to be completed by June 2027.
Cantor Fitzgerald has rated Booz Allen Hamilton as a "Top Pick" in the government technology sector, citing potential growth in free cash flow per share as a key factor. The firm maintained an Overweight rating and a price target of $160. Furthermore, Booz Allen has appointed Ambassador Robert C. O’Brien to its Board of Directors, bringing his extensive national security experience to the company. These developments reflect Booz Allen’s strategic initiatives to enhance its capabilities and expand its influence in the technology and defense sectors.
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