Booz Allen Hamilton Holding Corporation Common Stock (BAH)

FairStock Score: 62/100 — STEADY

Key Financials

Strengths

• Generates $809 million in annual free cash flow (8.6% yield on market cap)
• High return on equity of 75.1% demonstrating efficient capital deployment
• Attractive 3.0% dividend yield providing steady income returns
• Established organization with 31,600 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($36) with negative 117% margin of safety—limited downside protection
• High leverage at 4.04x debt-to-equity increases financial risk and interest expense burden
• Revenue declining at 10.2% year-over-year signals potential demand weakness or market share loss

AI Analysis

Booz Allen Hamilton Holding Corporation Common Stock is a small-cap industrials company valued at $9.4 billion. The business generates $11.4 billion in annual revenue with a 1.8% net margin and $809 million in free cash flow. From a quality standpoint, Booz shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 2.3 in the grey zone. On valuation, the stock is attractively valued at 11.7x earnings, with trades far above its Graham Number ($36) with no margin of safety. Growth dynamics show revenue growing at -10.2% and profit growth of 7.0%. The 3.0% dividend yield adds an income component for patient holders. Our composite FairStock Score of 62/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Booz's consistent 75% ROE at just 12x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $809 million in annual free cash flow (8.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 4.0x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer