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In December 2018, Booz Allen Hamilton Holding Corporation (NYSE:BAH) released its earnings update. Generally, analyst consensus outlook seem pessimistic, with earnings expected to decline by 0.2% in the upcoming year against the past 5-year average growth rate of 9.6%. Currently with a trailing-twelve-month profit of US$303m, the consensus growth rate suggests that earnings will drop to US$303m by 2020. Below is a brief commentary on the longer term outlook the market has for Booz Allen Hamilton Holding. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Booz Allen Hamilton Holding going to perform in the near future?
The view from 9 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for BAH, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 4.8% based on the most recent earnings level of US$303m to the final forecast of US$346m by 2022. EPS reaches $3.5 in the final year of forecast compared to the current $2.08 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 4.9% to 4.6% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Booz Allen Hamilton Holding, there are three key aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Booz Allen Hamilton Holding worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Booz Allen Hamilton Holding is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Booz Allen Hamilton Holding? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.