Booz Allen Hamilton Holding Corporation (BAH): A Bull Case Theory

We came crossed a bullish thesis connected Booz Allen Hamilton Holding Corporation connected Caffeinated Memos’s Substack. In this article, we volition summarize the bulls’ thesis connected BAH. Booz Allen Hamilton Holding Corporation's stock was trading astatine $89.01 arsenic of February 6th. BAH’s trailing and guardant P/E were 13.21 and 14.84 respectively according to Yahoo Finance.

Booz Allen Hamilton Holding Corporation, a exertion company, provides exertion solutions utilizing artificial intelligence, cyber, and different technologies for government's cabinet-level departments and commercialized customers successful the United States and internationally. BAH the second-largest U.S. authorities IT contractor, is trading successful a 50% drawdown—its worst arsenic a nationalist company—despite a 110-year past and a agelong grounds of compounding growth. Roughly 98% of gross comes from U.S. authorities contracts, historically the world’s safest customer, enabling 5% yearly gross maturation and astir 25% EPS maturation implicit the past 15 years.

The caller disruption stems from the Department of Government Efficiency (DOGE), which targeted national outgo cuts and pressured contractors. Booz Allen’s gross declined 8% year-over-year and escaped currency travel fell 29%, with harm concentrated successful its civilian portfolio, which represents 35% of gross and carries higher margins. Management expects civilian gross to autumn successful the low-20% scope this year, weighing connected margins. However, DOGE has since disbanded, medication rhetoric astir cuts has softened, and absorption confirmed civilian trends person stabilized with nary caller declaration actions.

The remaining 65% of the business—largely nationalist information and defense—is structurally advantaged. Booz Allen’s moat is its cleared workforce: 72% of employees clasp information clearances and 29% person subject backgrounds. With clearance processes taking months and contracts requiring specialized expertise, Booz Allen wins 56% of caller bids and 92% of recompetes, often facing constricted competition.

It is profoundly embedded across defense and quality agencies, a starring AI and cybersecurity contractor, and good positioned for rising defense budgets, including $150 cardinal of incremental subject spending. Yet guidance assumes muted procurement trends and excludes upside from large wins, creating a debased bar. Trading astatine 11x EV/EBITDA—30% beneath its humanities average—and adjacent the CEO’s caller acquisition terms astir $85, Booz Allen offers a imaginable inflection accidental if maturation resumes.

Previously, we covered a bullish thesis on CACI International Inc (CACI) by smantel in March 2025, which highlighted the company’s resilient defense-focused gross mix, recurring contracts, beardown backlog, and undervaluation pursuing DOGE-related concerns. CACI's banal terms has appreciated by astir 75.20% since our coverage. Caffeinated Memos shares a akin presumption but emphasizes connected Booz Allen’s civilian stabilization and imaginable rerating aft its crisp drawdown.