| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 69.30 | -21 |
| Intrinsic value (DCF) | 43.49 | -51 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 111.40 | 26 |
Booz Allen Hamilton Holding Corporation (LSE: 0HOT.L) is a leading global provider of management and technology consulting, analytics, engineering, digital solutions, and cyber services. Headquartered in McLean, Virginia, the company serves governments, corporations, and non-profit organizations with expertise in AI, data science, automation, quantum computing, and cybersecurity. Founded in 1914, Booz Allen has established itself as a trusted partner in mission-critical operations, offering end-to-end solutions in defense, intelligence, and civilian sectors. With a strong focus on innovation, the firm leverages modern methodologies to deliver transformational digital and engineering services. Booz Allen operates in the high-growth Software & Services sector, capitalizing on increasing demand for advanced analytics and cybersecurity solutions. The company’s diversified client base and deep government contracts provide stability, while its investments in AI and automation position it for long-term growth in an increasingly tech-driven world.
Booz Allen Hamilton presents a compelling investment case due to its strong government contracting base, recurring revenue streams, and leadership in high-demand tech consulting services. The company’s $16.9B market cap and steady financial performance (FY2024 revenue of $10.66B, net income of $605.7M) reflect its stability in the consulting and IT services sector. Its low beta (0.561) suggests defensive characteristics, making it resilient in volatile markets. However, high reliance on U.S. government contracts (~70% of revenue) introduces regulatory and budgetary risks. The firm’s investments in AI, cybersecurity, and quantum computing align with long-term growth trends, but competition from larger IT consultancies and tightening defense budgets could pressure margins. The 2.08% dividend yield adds income appeal, though investors should monitor debt levels ($3.64B) and capital expenditures.
Booz Allen Hamilton competes in the highly fragmented IT consulting and professional services market, differentiating itself through deep government expertise, particularly in defense and intelligence sectors. Its competitive advantage lies in its security clearances, long-term federal contracts, and specialized capabilities in AI and cyber risk management. Unlike broader IT services firms, Booz Allen focuses on high-complexity, mission-critical projects, giving it pricing power and client stickiness. However, it faces intense competition from larger diversified players like Accenture and Deloitte in commercial markets, while pure-play government contractors like Leidos challenge its defense dominance. The company’s mid-size scale allows agility in adopting emerging technologies but limits its ability to compete on cost in commoditized IT services. Its investments in AI/ML and quantum computing provide differentiation, though tech giants like Google and Microsoft are also targeting these high-growth areas. Booz Allen’s hybrid consulting-technology model balances higher-margin advisory work with scalable digital solutions, but margin pressures persist due to talent costs and competitive bidding in government contracts.