Abstract
Booz Allen Hamilton will report fiscal third-quarter 2026 results on January 23, 2026 Pre-Market, with market expectations centering on revenue of $3.04 billion and adjusted EPS of $1.66, supported by company forecasts that point to year-over-year growth and a constructive contract-mix trajectory.
Market Forecast
Consensus and company projections indicate fiscal third-quarter 2026 revenue of $3.04 billion, adjusted EPS of $1.66, and EBIT of $305.73 million, reflecting year-over-year increases of 6.03%, 9.24%, and 7.39%, respectively. Forecasted margins are not disclosed in the available projections, but the implied earnings profile suggests positive leverage relative to last quarter’s baseline.
The main business remains anchored by cost-reimbursable work, complemented by time-and-materials and fixed-price contracts; the expected return to year-over-year top-line growth highlights a stabilizing trajectory after a contraction last quarter. The most promising segment for incremental margin support is fixed-price, with $539.00 million in revenue last quarter, against a company-level forecast of 6.03% year-over-year revenue growth this quarter.
Last Quarter Review
Booz Allen Hamilton’s fiscal second-quarter 2026 delivered revenue of $2.89 billion (-8.15% year-over-year), a gross profit margin of 21.87%, GAAP net profit attributable to the parent company of $175.00 million, a net profit margin of 6.06%, and adjusted EPS of $1.49 (-17.68% year-over-year).
Sequentially, GAAP net profit decreased by 35.42%, underscoring a quarter marked by a softer profit conversion relative to the revenue base. The main business mix was led by cost-reimbursable contracts at $1.71 billion (59.27% of revenue), with time-and-materials at $638.00 million (22.08%) and fixed-price at $539.00 million (18.65%), as total revenue declined by 8.15% year-over-year.
Current Quarter Outlook (with major analytical insights)
Main Business: Cost-Reimbursable Contracts and Core Delivery
The center of Booz Allen Hamilton’s quarterly performance remains its cost-reimbursable portfolio, which accounted for 59.27% of last quarter’s revenue at $1.71 billion. Under this structure, revenue scales with eligible costs and approved rates, so utilization, billable hours, and timely recoverability are central. Against last quarter’s gross margin baseline of 21.87% and net margin of 6.06%, the company’s forecast of $3.04 billion in revenue and $1.66 adjusted EPS suggests improved earnings conversion as sequential dynamics normalize and year-over-year comparisons turn favorable.
The company’s forecasted year-over-year revenue growth of 6.03% and EPS growth of 9.24% indicate more efficient throughput of core delivery, assuming mix effects and cost capture align with plan. That guidance implies the cost-reimbursable stream can anchor the top line while still allowing operating leverage to show up in EBIT, which is projected to rise to $305.73 million (+7.39% year-over-year). Execution hinges on disciplined project management, consistent quality in deliverables, and effective labor deployment, all of which tend to sustain billable activity and protect margin within this contract type.
An incremental positive this quarter would be evidence of tighter variance between incurred costs and recoveries, which often signals operational rhythm and lower timing mismatches. If this cadence holds, revenue growth should flow more clearly through to adjusted EPS, strengthening investor confidence in the trajectory implied by company guidance. On the flip side, any slippage in cost recoverability or inefficiency in staffing could dampen the translation of the projected top-line recovery into earnings, which is why this segment’s operating discipline will be vital to validating the forecast.
Most Promising Segment: Fixed-Price Margin Leverage
Fixed-price contracts represented $539.00 million last quarter, or 18.65% of total revenue, and typically offer a pathway to margin expansion when delivery performance is tight. While these contracts carry execution risk, they can provide meaningful upside to gross margin relative to the 21.87% level observed last quarter if schedules, scope, and cost control are maintained. With company-level revenue forecast to increase 6.03% year-over-year and EBIT projected to grow 7.39%, a small positive shift in mix toward fixed-price work could enhance profitability beyond what pure volume growth implies.
This quarter, the focus within fixed-price work will be how effectively the company manages cost baselines laid down at bid, as any favorable variance can support a higher conversion of revenue to EBIT and adjusted EPS. Because last quarter’s sequential net profit declined by 35.42%, the market will look for signs that fixed-price programs are tracking to plan and providing margin lift to offset any residual cost timing in other areas. The stronger the performance in fixed-price, the more persuasive the case that the company can sustain the 9.24% year-over-year growth implied for adjusted EPS this quarter.
The potential of fixed-price margin leverage is particularly relevant given the projected EBIT of $305.73 million. This figure, combined with forecasted EPS of $1.66, suggests management anticipates solid execution and disciplined delivery. If the quarter demonstrates that fixed-price engagements are contributing incrementally to margin while cost-reimbursable work supports volume, investors may view the earnings path as on track with guidance.
Key Stock Price Drivers This Quarter
Investor reaction will hinge on whether reported revenue and adjusted EPS align with or surpass the guidance-aligned projections of $3.04 billion and $1.66, respectively. Margin messaging will be closely watched; the last quarter’s 21.87% gross margin and 6.06% net margin provide the baseline, and incremental improvement would validate the transformation of guidance into realized profitability. Because sequential net profit fell 35.42% last quarter, evidence of stabilization and clean quarter-on-quarter progression can be a catalyst for sentiment, particularly if the mix shows well-managed fixed-price contributions.
The translation of company-level year-over-year growth into segment outcomes will also matter, since transparency around contract execution, billability, and backlog conversion helps investors judge sustainability. Strong commentary on delivery milestones, staffing continuity, and billable utilization will be constructive if it establishes that the guidance is supported by operational progress, not just favorable comparisons. A thorough bridge from EBIT growth of 7.39% year-over-year to adjusted EPS growth of 9.24% will be assessed for proportionality, with attention to interest, tax, and share-count factors that can refine the EPS outcome.
Finally, management’s visibility on the rest of fiscal year 2026, as inferred from this quarter’s guidance and any qualitative commentary, will influence how investors extrapolate the path for revenue and profitability. The market is likely to interpret any confirmed improvement in contract mix and cost control as consistent with the bullish stance maintained by institutional coverage. If results are in line or better than expected, the stock reaction can be sensitive to forward indications about whether the projected recovery remains intact, with particular emphasis on margin quality and earnings conversion.
Analyst Opinions
Bullish views predominate at 100.00% of the collected opinions. Cantor Fitzgerald maintained a Buy rating on October 24, 2025, with a price target of $160.00, signaling support for the near-term earnings trajectory and the company’s ability to translate its forecasted revenue growth of 6.03% year-over-year and EPS growth of 9.24% into reported performance. This stance is consistent with a constructive interpretation of the contract mix, where fixed-price work can add margin leverage while cost-reimbursable activity underpins revenue continuity.
Analysts see room for positive interpretation if Booz Allen Hamilton demonstrates disciplined delivery across its segments and shows that EBIT growth of 7.39% can translate proportionally into adjusted EPS of $1.66. In this framework, upside to the stock is typically tied to evidence that gross margin can stabilize or improve from last quarter’s 21.87% baseline and that net margin can move above 6.06% as execution efficiencies are realized. The bullish case, as articulated by institutional coverage, leans on the view that guidance is not only reasonable but supported by operational factors that can be observed in quarterly results and accompanying commentary.
With last quarter’s year-over-year declines (-8.15% for revenue and -17.68% for adjusted EPS) setting a lower comparative bar, a return to growth this quarter provides a test of resiliency and planning. The degree to which reported outcomes validate the $3.04 billion revenue forecast and the $1.66 adjusted EPS will determine whether the bullish narrative remains dominant. If management outlines a credible plan for mix, delivery timing, and cost control that aligns with the observed results, the analyst majority’s favorable stance is likely to hold, reinforcing investor confidence in the near-term earnings path.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments