Booz Allen Hamilton Holding Corp (BAH) Stock Analysis
Booz Allen Hamilton Holding Corp (BAH) Stock Analysis
Analysis from 10-Q filed 2025-10-24. Data as of Q4 2025.
Overall Grade: F (Concerning)
Booz Allen Hamilton Holding Corp faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 20.2% | Above industry average |
| FCF Margin | 8.2% | Healthy cash flow |
| Debt/Equity | 3.8x | Elevated debt |
Investment Thesis: Strong return on invested capital of 20.2% suggests durable competitive advantages and efficient capital allocation.
Explore Booz Allen Hamilton Holding Corp: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Booz Allen Hamilton Holding Corp earns 20.2% ROIC, Top 25% in Industrials
Booz Allen Hamilton Holding Corp's trailing-twelve-month ROIC of 20.2% ranks Top 25% in Industrials companies (sector median: 7.4%), driven by NOPAT margin of 8.7% combined with asset turnover of 1.6x. Source: 10-Q filed 2025-10-24. Gross margin of 52.7% with operating margin at 9.2% reflects strong pricing power.
| Metric | BAH | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.2% | Excellent | Above sector median of 7.4% |
| Return on Equity (ROE) | 80.3% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 52.7% | Excellent | Strong pricing power |
| Operating Margin | 9.2% | Adequate | Moderate operational efficiency |
Cash Flow: Booz Allen Hamilton Holding Corp generates $933.0M FCF at 8.2% margin, positive NaN/8 quarters
Booz Allen Hamilton Holding Corp generated $933.0M in free cash flow (TTM), a 8.2% FCF margin, a margin that ranks Top 50% in Industrials. Operating cash flow exceeds net income by 1.2x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-24.
| Metric | BAH | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 8.2% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $933.0M | Good | Positive cash generation |
| OCF/Net Income | 1.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Booz Allen Hamilton Holding Corp at 3.8x leverage
Booz Allen Hamilton Holding Corp's debt-to-equity ratio of 3.8x reflects high leverage. Total debt of $3.9B offset by $882.0M in cash. Source: 10-Q filed 2025-10-24.
| Metric | BAH | Rating | Context |
|---|---|---|---|
| Debt to Equity | 3.8x | Red flag | Elevated leverage |
| Net Cash Position | $-3.1B | Warning | Net debt position |
Valuation: Booz Allen Hamilton Holding Corp trades at 12.5x earnings
Booz Allen Hamilton Holding Corp trades at a P/E of 12.5x. Free cash flow yield of 9.0% offers attractive cash returns relative to price.
| Metric | BAH | Rating | Context |
|---|---|---|---|
| P/E Ratio | 12.5x | Adequate | Reasonable valuation |
| EV/Sales | 1.2x | Excellent | Attractive revenue multiple |
| FCF Yield | 9.0% | Excellent | Attractive cash return |
| Dividend Yield | 2.6% | Adequate | Growth focus over income |
Capital Allocation: Booz Allen Hamilton Holding Corp returns 10.6% shareholder yield
Booz Allen Hamilton Holding Corp's total shareholder yield is 10.6% (dividends 2.6% + buybacks 8.0%). Source: 10-Q filed 2025-10-24.
| Metric | BAH | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 10.6% | Excellent | Dividend + buyback yield combined |
| Buyback Yield | 8.0% | Good | Active share repurchases |
| Total Capital Returned (TTM) | $1.1B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.2% | Top 25% | 2.7x above |
| Free Cash Flow Margin | 8.2% | Top 50% | 1.8x above |
| Gross Margin | 52.7% | Top 25% | 1.6x above |
| Operating Margin | 9.2% | Top 50% | 1.2x above |
| Return on Equity (ROE) | 80.3% | Top 5% | 9.2x above |
| P/E Ratio | 12.5x | N/A | - |
Financial Scorecard
| Metric | BAH | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.2% | Excellent | Top 25% of sector (median: 7.4%) |
| Free Cash Flow Margin | 8.2% | Adequate | Top 50% of sector (median: 4.6%) |
| Gross Margin | 52.7% | Excellent | Top 25% of sector (median: 33.1%) |
| Debt to Equity Ratio | 384.4% | Red flag | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 12.5x | Adequate | Attractively valued |
| Free Cash Flow Yield | 9.0% | Excellent | High cash return |
Frequently Asked Questions
Q: What is Booz Allen Hamilton Holding Corp's Return on Invested Capital (ROIC)?
Booz Allen Hamilton Holding Corp (BAH) has a trailing twelve-month Return on Invested Capital (ROIC) of 20.2%. This compares above the sector median of 7.4%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is Booz Allen Hamilton Holding Corp's Free Cash Flow Margin?
Booz Allen Hamilton Holding Corp (BAH) has a free cash flow margin of 8.2%, generating $933.0 million in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is Booz Allen Hamilton Holding Corp stock overvalued or undervalued?
Booz Allen Hamilton Holding Corp (BAH) trades at a P/E ratio of 12.5x, which is above the sector median of N/A. The EV/Sales multiple is 1.2x. Free cash flow yield is 9.0%, which represents an attractive cash return to investors.
Q: Does Booz Allen Hamilton Holding Corp pay a dividend?
Booz Allen Hamilton Holding Corp (BAH) currently pays a dividend yield of 2.6%. Including share buybacks, the total shareholder yield is 10.6%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: How much debt does Booz Allen Hamilton Holding Corp have?
Booz Allen Hamilton Holding Corp (BAH) has a debt-to-equity ratio of 3.8x with total debt of $3.9 billion. Net debt position is $3.1 billion.
Q: What is Booz Allen Hamilton Holding Corp's revenue and earnings growth?
Booz Allen Hamilton Holding Corp (BAH) declined revenue by 3.1% year-over-year. Earnings per share increased by 0.4% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is Booz Allen Hamilton Holding Corp buying back stock?
Booz Allen Hamilton Holding Corp (BAH) repurchased $836.0 million of stock over the trailing twelve months. This represents a buyback yield of 8.0%.
Q: How does Booz Allen Hamilton Holding Corp compare to competitors in Industrials?
Compared to other companies in Industrials, Booz Allen Hamilton Holding Corp (BAH) shows: ROIC of 20.2% is above the sector median of 7.4% (Top 13%). FCF margin of 8.2% exceeds the sector median of 4.6% (Top 35% of sector). Gross margin at 52.7% is 19.6 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with Booz Allen Hamilton Holding Corp?
Investors in Booz Allen Hamilton Holding Corp (BAH) should monitor these potential warning signs: 1) Debt-to-equity of 3.8x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-24. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.