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Booz Allen Hamilton (BAH) to Report Q4 Earnings: What's Up?

Zacks Equity Research

Booz Allen Hamilton Holding Corporation BAH will report fourth-quarter fiscal 2019 results on Apr 28, before the bell.

In the fiscal third quarter, the company delivered a positive earnings surprise of 13.3%. It has a trailing four quarter average positive surprise of 19.3%.

We observe that the company's shares have gained 47.2% over the past year, outperforming its industry’s gain of 24.2%.

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 $1.7 billion, above $1.6 billion reported in the year-ago quarter.

Booz Allen Hamilton Holding Corporation Revenue (TTM)

 

Booz Allen Hamilton Holding Corporation Revenue (TTM) | Booz Allen Hamilton Holding Corporation Quote

 

Operational Excellence to Boost the Bottom Line

Strong contract level performance, operational excellence and cost management are expected to expand margins in the to be reported quarter. Margin expansion along with revenue growth and lower tax rate are expected to drive earnings growth.

The consensus estimate for EPS is pegged at 62 cents, reflecting rise from 52 cents reported in the year-ago quarter.

What Our Model Says

Please note that 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 #3 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.

Stocks to Consider

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

SailPoint Technologies SAIL, with an Earnings ESP of +100.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Diebold Nixdorf, Incorporated DBD, with an Earnings ESP of +5.71% and a Zacks Rank #2.

EVERTEC EVTC, with an Earnings ESP of +3.73% and a Zacks Rank #3.

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