Booz Allen Stock Plummets: Here's What William Blair Predicts Next

Business Insider

24-05-2025

NYSE:BAH) stock took a hit today, plummeting 16.5% after the company announced a weaker-than-expected fiscal 2026 outlook and plans to lay off approximately 2,500 employees – about 7% of its workforce – primarily from its civilian government agency division.
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The move comes as a direct response to shifting federal priorities. The Trump administration's aggressive cost-cutting measures, spearheaded by the Department of Government Efficiency (DOGE), have slashed civilian contract spending. While Booz Allen's defense and intelligence units remain solid performers, its civilian segment has borne the brunt of the cuts, prompting the company to restructure that part of the business to align with the new policy landscape.
Against this backdrop, the company reported adjusted EPS of $1.61 for the first quarter, in line with expectations, but revenue came in at $2.97 billion, about $60 million below estimates. For fiscal 2026, Booz Allen is projecting revenue between $12 and $12.5 billion and adjusted EPS of $6.20 to $6.55, both below analyst estimates of $12.82 billion and $6.92, respectively.
Weighing in after the earnings call, William Blair analyst Louie DiPalma shared his take on the guidance reset, the impact of civilian contract reductions, and how these developments might influence sentiment among investors.
'Booz Allen on the earnings call indicated that several large civilian technology contracts have been descoped, which should contribute to a low-double-digit decline in civil revenue for this new fiscal year. However, it was described as a one-time reset. Civil revenue is expected to reaccelerate in the second half of the year… While shares of government IT peers may trade down in sympathy with Booz Allen results, sentiment may soon turn positive as investors focus on 2026 and outer years,' DiPalma opined.
For now, the analyst anticipates BAH stock will remain 'range-bound until there is greater visibility,' and accordingly, maintains a Market Perform (i.e., Neutral) rating. (To watch DiPalma's track record, click here)
Overall, Wall Street is somewhat more divided on BAH shares, a circumstance reflected in the Moderate Buy analyst consensus rating. That rating is based on 9 reviews, including 4 Buys, 4 Holds, and a single Sell. Shares are priced at $107.79, and the average price target suggests an upside potential of 27% for the next 12 months. (See BAH stock forecast)
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