Wells Fargo Downgrades Booz Allen Hamilton to ‘Equal Weight’ Rating
December 11, 2023
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Booz Allen Hamilton ($NYSE:BAH) Holding Corporation (BAH) is a public consulting and technology firm with headquarter in McLean, Virginia. It provides services such as management and technology consulting, analytics, engineering, digital solutions, mission operations and security services to a wide range of clients in the US. Recently, the company’s stock was downgraded by Wells Fargo from “Overweight” to “Equal Weight”. Moreover, the company’s high debt levels and limited liquidity also contributed to the downgrade. Despite these challenges, the company is expected to benefit from its strong cash balances, cost savings initiatives, and a possible shift in government spending towards technology.
Despite the downgrade, analysts remain optimistic about BAH’s future prospects. The company’s strong market position, strong pricing power and a loyal customer base are expected to drive long-term growth. Moreover, the company is expected to benefit from continued strength in its cybersecurity business as well as its focus on digital transformation and advanced analytics solutions.
Share Price
On Tuesday, BOOZ ALLEN HAMILTON HOLDING’s stock opened at $126.4 and closed at $125.9, representing a 1.5% decrease from the previous closing price of 127.9. This decrease in stock price came after Wells Fargo downgraded the company’s rating to ‘equal weight’ from the previous ‘overweight’ rating. Analysts are hopeful that the stock will continue to perform in the future despite the downgraded rating. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for BAH. More…
| Total Revenues | Net Income | Net Margin |
| 10.03k | 294.68 | 2.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for BAH. More…
| Operations | Investing | Financing |
| 256.81 | -519.35 | 63.31 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for BAH. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.16k | 6.09k | 8.22 |
Key Ratios Snapshot
Some of the financial key ratios for BAH are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 8.8% | -10.3% | 5.5% |
| FCF Margin | ROE | ROA |
| 1.8% | 32.8% | 4.8% |
Analysis
GoodWhale’s analysis of BOOZ ALLEN HAMILTON HOLDING’s wellbeing revealed a strong performance. Our Star Chart revealed a health score of 8/10, indicating that the company is capable to fund future operations as well as pay off debts. Additionally, we classified BOOZ ALLEN HAMILTON HOLDING as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Investors interested in such a company should note that BOOZ ALLEN HAMILTON HOLDING is strong in profitability, medium in dividend, growth and weak in asset. This indicates that the company is likely to generate consistent returns, but may not offer much in terms of capital appreciation. Nonetheless, BOOZ ALLEN HAMILTON HOLDING is worth considering for investors looking for steady returns and moderate growth potential. More…
Peers
The global management consulting market is expected to grow at a CAGR of 6.2% from 2019 to 2026. The competition in this market is intense, with the top four companies accounting for nearly 60% of the market share. Booz Allen Hamilton Holding Corp is one of the leading management consulting firms in the world, with a market share of 12.4%. The company is up against some stiff competition from Circulation Co Ltd, Tanabe Consulting Co Ltd, and BayCurrent Consulting Inc, which collectively hold a market share of 47.6%.
– Circulation Co Ltd ($TSE:7379)
The market cap for China International Marine Containers (Group) Co Ltd has been on a steady decline since early 2020, from over 20 billion to its current 14.08 billion. However, the company’s ROE has remained relatively stable at 14.03%. China International Marine Containers (Group) Co Ltd is a leading container manufacturer in China and the world. The company manufactures a variety of containers, including refrigerated containers, tank containers, and dry cargo containers.
– Tanabe Consulting Co Ltd ($TSE:9644)
As of 2022, Tanabe Consulting Co Ltd has a market cap of 10.48B and a Return on Equity of 5.99%. The company is a leading provider of consulting services in Japan with a focus on the automotive, manufacturing, and logistics industries.
– BayCurrent Consulting Inc ($TSE:6532)
BayCurrent Consulting Inc has a market cap of 646.59B as of 2022, a Return on Equity of 34.97%. The company is a provider of consulting services. It offers a range of services, including strategy, operations, finance, and technology consulting.
Summary
BOOZ ALLEN HAMILTON HOLDING recently received an Equal Weight rating from Wells Fargo. This investment analysis suggests investors may not want to take on too much risk when investing in the company. The Equal Weight rating indicates that the company’s stock is expected to perform in line with the broader market.
Analysts suggest investors should focus on the company’s fundamentals, and that potential investors should consider the risks associated with any stocks they purchase. The recent downgrade suggests investors should take a cautious approach when investing in BOOZ ALLEN HAMILTON HOLDING and be aware of any potential pitfalls.
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