Booz Allen Hamilton (NYSE: BAH), a leading technology and consulting firm specializing in government contracts, saw its stock price plummet following its fourth-quarter fiscal 2025 earnings release on May 23, 2025.
The McLean, Virginia-based company reported quarterly adjusted earnings per share of $1.61, slightly above analyst estimates of $1.59. However, quarterly revenue of $2.97 billion, while up 7.3% year-over-year, fell short of the expected $3.03 billion. More concerning to investors was the company's weak fiscal 2026 outlook, with projected adjusted EPS between $6.20 and $6.55 on revenue of $12.0-12.5 billion, significantly below analyst expectations of $6.92 EPS and $12.82 billion in revenue.
In response to these challenges, Booz Allen announced plans to reduce its workforce by approximately 7% (about 2,500 jobs) in the first quarter of fiscal 2026, with cuts heavily concentrated in its Civil business segment. The layoffs come as the company faces the impact of reduced federal spending and slower-than-normal procurement processes, limiting its ability to quickly redeploy talent to new opportunities.
Following the earnings report, Raymond James analyst Brian Gesuale downgraded Booz Allen from Outperform to Market Perform on May 24, citing the company's "weak" quarterly report and guidance. The downgrade follows earlier analyst actions, including Goldman Sachs lowering its price target from $150 to $109 on April 11, 2025. The current analyst consensus price target stands at approximately $137, representing a potential 27% upside from current levels around $107.
Despite near-term challenges, Booz Allen continues to make strategic investments in advanced technologies. The company recently partnered with Meta to deploy "Space Llama," an AI-powered tech stack using Meta's Llama 3.2 model aboard the International Space Station. This initiative, announced on April 25, 2025, aims to support critical onboard repairs and maintenance without relying on Earth-based internet connectivity. The company's AI business grew over 30% year-over-year to approximately $800 million in fiscal 2025, highlighting its continued focus on artificial intelligence, cybersecurity, and quantum information sciences.
As Booz Allen navigates this transitional period, investors will be closely monitoring the company's ability to stabilize its Civil business segment while continuing to capitalize on growth opportunities in Defense and Intelligence sectors.