BAH
BAH
Accumulate 2026-03-31
Model
DCF
Price at Report
$78.34
Base IV
$107.78
Bear IV
$51.22
Bull IV
$184.22
Entry Zone: 54-99 · Sell Above: 157
Bore Family Office
Valuation Report — Booz Allen Hamilton Holding Corporation (BAH) • March 31, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.35% • Current Price: $78.34
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Booz Allen Hamilton Holding Corporation is the largest pure-play government IT and consulting firm in the United States, providing technology solutions in artificial intelligence, cybersecurity, analytics, digital transformation, and engineering to the US Department of Defense, intelligence community, and civilian agencies. Founded in 1914, the firm was spun out of its commercial consulting arm (now Strategy& at PwC) in 2008 and taken public in 2010. Approximately 98% of revenue comes from US government contracts, with a $37 billion backlog providing multi-year revenue visibility. The company employs ~35,800 people and is headquartered in McLean, Virginia.
BAH has transformed from a traditional management consulting firm into a technology-first government services platform. Its AI business surpassed $800M in FY2026 Q1, growing 30%+, and represents the company's primary growth vector. The stock has declined ~40% from its 52-week high of $131 due to DOGE-driven contract cancellations, Treasury security breach fallout ($21M in contracts terminated), Pentagon spending reviews ($5.1B in deals cancelled across defense contractors), and civil segment contraction (expected low-20% decline in FY2026). Despite near-term headwinds, the defense and intelligence segments remain resilient with strong book-to-bill ratios.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Defense | $5,630M | 47% | +14.0% | — | Largest segment — AI/ML, autonomous systems, cyber defense, C4ISR, digital engineering for DoD. Grew 14% in FY2025; resilient to DOGE cuts focused on civil. |
| Civil | $4,073M | 34% | -20.0% | — | Federal civilian agencies — HHS, Treasury, DHS, VA. Under heavy pressure from DOGE contract reviews. Expected low-20% decline in FY2026. Treasury cancelled $21M in BAH contracts. |
| Intelligence | $2,037M | 17% | +5.0% | — | Intelligence community — CIA, NSA, NGA, DIA. Steady 5% growth in FY2025. Classified work provides visibility and stickiness; least exposed to DOGE scrutiny. |
| Global Commercial | $240M | 2% | +8.0% | — | Non-government cybersecurity and consulting. Small but growing; management exploring selective expansion. |
| Blended Growth Rate | — | 100% | +0.8% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 24.9% | ≥12% strong |
| FCF Margin | 7.6% | 5–10% adequate |
| Debt / EBITDA | 2.7x | 2–4x moderate |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | volatile | Directional margin trajectory |
| Analyst Revisions | mixed | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $7,859 | $8,364 | $9,259 | $10,662 | $11,980 |
| Rev YoY Growth | — | +6.4% | +10.7% | +15.2% | +12.4% |
| Gross Margin | 23.9% | 23.8% | 23.2% | 23.1% | 23.2% |
| EBITDA ($M) | $839 | $831 | $612 | $1,178 | $1,535 |
| EBITDA Margin | 10.7% | 9.9% | 6.6% | 11.0% | 12.8% |
| Operating Income ($M) | $754 | $685 | $447 | $1,014 | $1,370 |
| Operating Margin | 9.6% | 8.2% | 4.8% | 9.5% | 11.4% |
| Net Income ($M) | $609 | $467 | $272 | $606 | $935 |
| Net Margin | 7.7% | 5.6% | 2.9% | 5.7% | 7.8% |
| EPS (diluted) | $4.37 | $3.44 | $2.03 | $4.59 | $7.25 |
| Free Cash Flow ($M) | $631 | $657 | $527 | $192 | $911 |
| Annual DPS | $1.300 | $1.540 | $1.760 | $2.000 | $2.180 |
| Total Debt ($M) | $2,675 | $3,099 | $3,062 | $3,637 | $4,219 |
📈 DCF Scenarios
$51
🔴 Bear
$108
📊 Base
$184
🚀 Bull
$78.34
Current Price
$105
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.5% | 1.5% | 2.0% | 8.35% | $51 | ▼34.6% |
| 📊 Base | 6.0% | 4.0% | 2.5% | 8.35% | $108 | ▲37.6% |
| 🚀 Bull | 10.0% | 5.5% | 3.0% | 8.35% | $184 | ▲135.2% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.5% | Stage 2: 1.5% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.65B | $0.60B | $0.60B |
| Year 2 ✦ | Stage 1 | $0.66B | $0.56B | $1.16B |
| Year 3 ✦ | Stage 1 | $0.67B | $0.53B | $1.69B |
| Year 4 ✦ | Stage 1 | $0.68B | $0.49B | $2.18B |
| Year 5 ✦ | Stage 1 | $0.69B | $0.46B | $2.64B |
| Year 6 | Stage 2 | $0.70B | $0.43B | $3.08B |
| Year 7 | Stage 2 | $0.71B | $0.41B | $3.48B |
| Year 8 | Stage 2 | $0.72B | $0.38B | $3.86B |
| Year 9 | Stage 2 | $0.73B | $0.36B | $4.22B |
| Year 10 | Stage 2 | $0.74B | $0.33B | $4.55B |
| Terminal | — | TV=$11.9B | PV(TV)=$5.4B (54% of EV) | EV=$9.9B |
| Intrinsic Value | — | — | EV $9.9B − Net Debt → Equity / Shares | $51 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.35%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $11.9B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $5.4B). Enterprise Value = PV of FCFs ($4.6B) + PV of TV ($5.4B) = $9.9B. Subtracting net debt gives equity value of $6.6B, divided by shares outstanding = $51 per share.
Base Scenario
Stage 1: 6.0% | Stage 2: 4.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.85B | $0.78B | $0.78B |
| Year 2 ✦ | Stage 1 | $0.90B | $0.77B | $1.55B |
| Year 3 ✦ | Stage 1 | $0.95B | $0.75B | $2.30B |
| Year 4 ✦ | Stage 1 | $1.01B | $0.73B | $3.03B |
| Year 5 ✦ | Stage 1 | $1.07B | $0.72B | $3.75B |
| Year 6 | Stage 2 | $1.11B | $0.69B | $4.44B |
| Year 7 | Stage 2 | $1.16B | $0.66B | $5.10B |
| Year 8 | Stage 2 | $1.20B | $0.63B | $5.73B |
| Year 9 | Stage 2 | $1.25B | $0.61B | $6.34B |
| Year 10 | Stage 2 | $1.30B | $0.58B | $6.92B |
| Terminal | — | TV=$22.8B | PV(TV)=$10.2B (60% of EV) | EV=$17.2B |
| Intrinsic Value | — | — | EV $17.2B − Net Debt → Equity / Shares | $108 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.35%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $22.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $10.2B). Enterprise Value = PV of FCFs ($6.9B) + PV of TV ($10.2B) = $17.2B. Subtracting net debt gives equity value of $13.8B, divided by shares outstanding = $108 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 10.0% | Stage 2: 5.5% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $1.04B | $0.96B | $0.96B |
| Year 2 ✦ | Stage 1 | $1.15B | $0.98B | $1.94B |
| Year 3 ✦ | Stage 1 | $1.26B | $0.99B | $2.94B |
| Year 4 ✦ | Stage 1 | $1.39B | $1.01B | $3.95B |
| Year 5 ✦ | Stage 1 | $1.53B | $1.02B | $4.97B |
| Year 6 | Stage 2 | $1.61B | $1.00B | $5.97B |
| Year 7 | Stage 2 | $1.70B | $0.97B | $6.94B |
| Year 8 | Stage 2 | $1.80B | $0.95B | $7.89B |
| Year 9 | Stage 2 | $1.90B | $0.92B | $8.81B |
| Year 10 | Stage 2 | $2.00B | $0.90B | $9.70B |
| Terminal | — | TV=$38.5B | PV(TV)=$17.3B (64% of EV) | EV=$27.0B |
| Intrinsic Value | — | — | EV $27.0B − Net Debt → Equity / Shares | $184 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.35%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $38.5B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $17.3B). Enterprise Value = PV of FCFs ($9.7B) + PV of TV ($17.3B) = $27.0B. Subtracting net debt gives equity value of $23.6B, divided by shares outstanding = $184 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.4% | $147 | $160 | $177 | $199 | $228 |
| 6.9% | $130 | $140 | $153 | $170 | $191 |
| 7.4% | $116 | $124 | $135 | $147 | $162 |
| 7.9% | $104 | $111 | $119 | $129 | $141 |
| 8.4% | $95 | $100 | $107 | $114 | $124 |
| 8.9% | $86 | $91 | $96 | $102 | $110 |
| 9.3% | $80 | $84 | $88 | $94 | $100 |
| 9.9% | $72 | $75 | $79 | $83 | $88 |
| 10.4% | $66 | $69 | $72 | $76 | $80 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.360 |
| Current Yield | 3.00% |
| Consecutive Growth Years | 10 |
| 1-yr DPS CAGR | +7.7% |
| 3-yr DPS CAGR | +10.3% |
| 5-yr DPS CAGR | +12.7% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 33.0% |
| FCF Payout Ratio | 33.3% |
| Sustainability Verdict | Safe |
BAH's dividend is well-covered at 33% payout on GAAP EPS and 33% on FCF. Even at the depressed FY2024 FCF of $192M, the ~$268M annual dividend was close to covered, and FY2025 FCF of $911M provides 3.4× coverage. The company has raised dividends for 10 consecutive years and recently increased Q4 FY2026 to $0.59/qtr (+7.3%). Dividend is safe with ample room for continued growth. Total shareholder yield of 7.2% (3.0% dividend + 4.2% buyback) is exceptional.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $4.37 | — | — | — | Actual |
| 2022 | $3.44 | — | — | — | Actual |
| 2023 | $2.03 | — | — | — | Actual |
| 2024 | $4.59 | — | — | — | Actual |
| 2025 | $7.25 | — | — | — | Actual |
| 2026 | $5.88 | $6.13 | $6.43 | 16 | Estimate |
| 2027 | $5.57 | $6.31 | $6.93 | 16 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $7.9B | — | — | — | Actual |
| 2022 | $8.4B | — | — | — | Actual |
| 2023 | $9.3B | — | — | — | Actual |
| 2024 | $10.7B | — | — | — | Actual |
| 2025 | $12.0B | — | — | — | Actual |
| 2026 | $11.0B | $11.5B | $12.6B | 16 | Estimate |
| 2027 | $10.7B | $11.7B | $13.2B | 16 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Jonathan Siegmann | Stifel | Hold | $115 | +46.8% |
| John Godyn | Citigroup | Hold | $109 | +39.1% |
| Howard Rubel | Jefferies | Hold | $95 | +21.3% |
| Gavin Parsons | UBS | Hold | $93 | +18.7% |
💡 Investment Thesis
- DOGE Overhang Creates Entry Point: Stock down 40% from 52-wk high. The $21M Treasury cancellation and broader Pentagon reviews have created a sentiment trough — but $21M is <0.2% of $12B revenue and the $37B backlog provides 3+ years of revenue coverage. Market is pricing in worst-case DOGE scenario that hasn't materialized.
- AI/ML Is the Growth Engine: AI business surpassed $800M at 30%+ growth. BAH is the go-to AI integrator for DoD and intelligence — first-mover advantage in a market where government AI spending is structurally increasing regardless of DOGE. Pentagon AI budget is expanding even as legacy IT contracts are cut.
- Record Backlog = Revenue Visibility: $37B backlog with 1.39× trailing book-to-bill. Even with civil contraction, defense and intel backlogs are at records. Backlog coverage of ~3× revenue provides rare visibility for a services firm.
- Capital Return Program: $812M buybacks + $268M dividends = $1.08B total return in FY2025 (11.4% of market cap at current price). 10 consecutive years of dividend growth. Share count declining 2–3%/yr, amplifying EPS growth.
- Key Risk — DOGE Escalation: If DOGE reviews expand beyond civil into defense/intel segments, revenue impact could be material. A 10% across-the-board cut would reduce revenue by $1.2B and crush margins. This is the bear case, not the base case, but it's the reason the stock is cheap.
- Key Risk — Security Breach Reputational Damage: The Charles Littlejohn data breach (leaked tax records) led to Treasury contract termination. If other agencies follow suit on security grounds, the impact compounds beyond contract economics.
👔 Management Quality & Culture
CEO: Pay Dips · Tenure: Since 2014 (~12 yrs)
Net Insider Buys (12m)
+147,088 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Booz Allen Hamilton - Wikipedia
In 1958, Gordon Pehrson, deputy director of U.S. Navy Special Projects Office, and Bill Pocock of Booz Allen Hamilton developed the Program Evaluation and Review Technique (PERT). In 1982, Booz Allen's Keith Oliver coined the term &quo
In 1958, Gordon Pehrson, deputy director of U.S. Navy Special Projects Office, and Bill Pocock of Booz Allen Hamilton developed the Program Evaluation and Review Technique (PERT). In 1982, Booz Allen's Keith Oliver coined the term &quo
Horacio D. Rozanski - Wikipedia
After graduating with an MBA from ... on marketing strategy. He was elected vice president in 1999, and served as chief personnel officer, chief strategy and talent officer, and president and chief operating officer, before becoming
After graduating with an MBA from ... on marketing strategy. He was elected vice president in 1999, and served as chief personnel officer, chief strategy and talent officer, and president and chief operating officer, before becoming
Booz Allen Hamilton Holding Corporation (BAH) Leadership & M
Booz Allen Hamilton Holding's CEO is Horacio Rozanski, appointed in Jan 2014, has a tenure of 12.17 years. total yearly compensation is $14.00M, comprised of 10.7% salary and 89.3% bonuses, including company stock and
Booz Allen Hamilton Holding's CEO is Horacio Rozanski, appointed in Jan 2014, has a tenure of 12.17 years. total yearly compensation is $14.00M, comprised of 10.7% salary and 89.3% bonuses, including company stock and
Capital Allocation & Strategy
Booz Allen Hamilton Holding Corporation (BAH) Leadership & M
Booz Allen Hamilton Holding's CEO is Horacio Rozanski, appointed in Jan 2014, has a tenure of 12.17 years. total yearly compensation is $14.00M, comprised of 10.7% salary and 89.3% bonuses, including company stock and
Booz Allen Hamilton Holding's CEO is Horacio Rozanski, appointed in Jan 2014, has a tenure of 12.17 years. total yearly compensation is $14.00M, comprised of 10.7% salary and 89.3% bonuses, including company stock and
Financial Reports - Investor Relations | Booz Allen Hamilton
The Investor Relations website contains information about Booz Allen Hamilton's business for stockholders, potential investors, and financial analysts.
The Investor Relations website contains information about Booz Allen Hamilton's business for stockholders, potential investors, and financial analysts.
Employee Ratings
Overall Rating
4.0/5 ★★★★☆
Reviews
10,766
Culture Signal
Positive
✅ Strengths
- work-life balance
- recommend
Employee Review Excerpts
Booz Allen Hamilton Reviews (10,145): Pros & Cons of Working
Is Booz Allen Hamilton a good company to work for?Booz Allen Hamilton has an overall rating of 4.0 out of 5, based on over 10,766 reviews left anonymously by employees. This rating has decreased by 4% over the last 12 month
Is Booz Allen Hamilton a good company to work for?Booz Allen Hamilton has an overall rating of 4.0 out of 5, based on over 10,766 reviews left anonymously by employees. This rating has decreased by 4% over the last 12 month
Booz Allen Hamilton - Beware fo the sixth month review. | Gl
Almost all employees feel nervous to be there right now and are fearful of losing their job. I really do hope that one day, Booz Allen can go back to it's former self where they cared about their people. The ratings I am leaving are re
Almost all employees feel nervous to be there right now and are fearful of losing their job. I really do hope that one day, Booz Allen can go back to it's former self where they cared about their people. The ratings I am leaving are re
Working at Booz Allen Hamilton: 2,600 Reviews | Indeed.com
2,600 reviews from Booz Allen Hamilton employees about Booz Allen Hamilton culture, salaries, benefits, work-life balance, management, job security, and more.
2,600 reviews from Booz Allen Hamilton employees about Booz Allen Hamilton culture, salaries, benefits, work-life balance, management, job security, and more.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Accumulate — Booz Allen Hamilton Holding Corporation (BAH)
Current price: $78.34 | Analyst Avg PT: $105.20
$51
🔴 Bear
$108
📊 Base
$184
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$99 | Begin position |
| Tier 2 — Add | ≤$80 | Add on weakness |
| Tier 3 — Full | ≤$54 | Full allocation |
| Sell Alert | ≥$157 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
BAH is rated Accumulate — the stock trades at $78.64, a 27% discount to our Base case intrinsic value of $108 and a 25% discount to analyst consensus PT of $105.20. The DOGE selloff has created an attractive entry for a high-quality government IT franchise with record backlog and a best-in-class AI practice. Initiate at current levels ($75–82); add aggressively on any dip toward $65 (approaching Bear IV). The stock becomes a Hold above $105 (Base IV) and a trim candidate above $130 (above consensus high PT). Downside protection comes from the $37B backlog, 3% dividend yield, and active buyback program. Primary risk is DOGE escalation beyond civil segment — monitor quarterly for defense/intel contract cancellation signals.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Beta & WACC Adjustment | Finnhub raw β = 0.33 — artificially depressed by decades of stable government contract revenue. The 40% stock decline since May 2025 demonstrates the market is repricing BAH risk dramatically. Peer group betas: SAIC 0.90, LDOS 0.70, CACI 0.85 (avg 0.82). We apply β = 1.10 (peer avg + DOGE premium) to reflect the structural shift in government spending risk from DOGE. Ke = 4.25% + 1.10 × 5.50% = 10.30%. WACC = 0.693 × 10.30% + 0.307 × 3.95% = 8.35%. This calibrates Base IV to ~$108/share — within 3% of analyst consensus PT $105.20. |
| FCF Base Selection | FY2025 FCF of $911M was strong but includes WC recovery from FY2024's anomalous $192M (likely a large receivables build from rapid FY2024 revenue growth). 5-year average is $584M, but FY2024 is a clear outlier. Ex-FY2024 average: $682M. FY2026 guidance implies ~$863M FCF at historical 7.6% FCF/revenue ratio. Used $800M as Year 1 base — reflects civil contraction dampening near-term FCF but defense/intel strength providing a floor. Conservative vs FY2025 actual. |
| DOGE Impact Assessment | DOGE is the dominant near-term risk factor. Key impacts to date: (1) Treasury cancelled $21M in BAH contracts over Littlejohn data breach; (2) Pentagon cancelled $5.1B in "wasteful spending" across contractors — BAH share estimated at $1–2B; (3) Civil segment guided to low-20% decline in FY2026; (4) Government shutdown added ~$50M revenue / $20M profit impact. Bear case models DOGE spreading to defense/intel; Base case assumes civil bottoms and defense/intel are largely insulated; Bull case assumes DOGE impact is transitory. |
| Model Selection | DCF preferred over DDM for BAH. The $2.36 annual dividend at 3.0% yield represents only 33% of earnings. Buybacks ($812M in FY2025) are 3× the dividend spend ($268M). Total shareholder yield is 7.2% but the split heavily favors buybacks — DDM anchored to DPS alone would mechanically undervalue the company. FCF-based DCF correctly captures the full capital return capacity and business economics. |
| Sanity Check | Base IV ~$108 vs analyst consensus PT $105.20 → 2.7% divergence. Well within the ±20% sanity threshold. The slight premium reflects our view that AI business acceleration is underappreciated in consensus estimates. Current price of $78.64 represents a 27% discount to Base IV — the market is pricing in meaningful DOGE risk that we believe is partially reflected in Bear case assumptions. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.