Booz Allen Stock Dips 8.1% Since Fiscal Q3 Earnings Release

Core Insights - Booz Allen Hamilton Holding Corp. (BAH) reported mixed third-quarter fiscal 2026 results, with earnings exceeding the Zacks Consensus Estimate while revenues fell short [1] - The stock has declined 8.1% since the results were released on January 23, 2026, primarily due to the revenue miss and weak fiscal 2026 guidance [1] Revenue and Earnings - BAH expects revenues to be between $11.3 billion and $11.4 billion, down from the previous guidance of $11.3 billion to $11.5 billion, with the midpoint below the Zacks Consensus Estimate of $11.38 billion [2] - Revenue growth is projected at 5-6%, while free cash flow is anticipated to be in the range of $825 million to $900 million, revised from $850 million to $950 million [2] - Quarterly adjusted earnings per share (EPS) were reported at $1.77, beating the Zacks Consensus Estimate by 40.5% and increasing 14.2% year-over-year [3] - Total revenues for the quarter were $2.62 billion, missing the consensus estimate by 3.9% and decreasing 10.2% year-over-year [3] Backlog and Book-to-Bill Ratio - Total backlog increased by 1.5% year-over-year to $38 billion, but fell short of the estimate of $42.88 billion [4] - Funded backlog decreased by 9.7% to $4.21 billion, missing expectations, while unfunded backlog rose by 18.7% but was below the estimate [4] - Priced options declined by 2.2% to $24.19 billion, also missing expectations, with a book-to-bill ratio of 0.3 compared to 0.6 in the previous year [5] EBITDA and Margins - Adjusted EBITDA was $285 million, a decrease of 14.2% year-over-year, but exceeded the estimate of $282.6 million [6] - The adjusted EBITDA margin on revenues was 10.9%, down 50 basis points year-over-year [6] Balance Sheet and Cash Flow - BAH ended the quarter with cash and cash equivalents of $882 million, slightly down from $885 million in the previous quarter [7] - Long-term debt decreased by 1.5% to $3.86 billion compared to $3.92 billion at the end of fiscal 2025 [7] - The company generated $801 million in net cash from operating activities, with capital expenditure at $195 million and free cash flow reported at $248 million [7] Fiscal Year 2026 Outlook - BAH expects adjusted diluted EPS to be in the range of $5.95 to $6.15, an increase from the prior guidance of $5.45 to $5.65, with the midpoint above the Zacks Consensus Estimate of $5.69 [8] - Free cash flow is anticipated to remain in the range of $825 million to $900 million [8]