Will Booz Allen (BAH) Beat Estimates Again in Its Next Earnings Report?

Looking for a stock that has consistently beaten earnings estimates and could be well-positioned to continue its streak into its next quarterly report? Booz Allen Hamilton (BAH), which belongs to the Zacks Government Services industry, could be a great candidate to consider.

The defense contractor has a well-established reputation for beating earnings estimates, especially looking at the past two reports. The company boasts an average earnings surprise of 16.90% over the past two quarters.

For the last reported quarter, Booz Allen showed earnings of $1.33 per share, compared to the Zacks consensus estimate of $1.22 per share, representing a surprise of 9.02%. In the previous quarter, the company was expected to show earnings of $1.13 per share and actually produced earnings of $1.41 per share, representing a surprise of 24.78%.

Price and EPS are surprising

Given this earnings history, the latest Booz Allen estimates are moving higher. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its strong Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat consensus estimates could be as many as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a revision of the Zacks Consensus definition that is related to revision. The idea is that analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other contributors to the consensus had previously predicted.

Booz Allen currently has an Earnings ESP of +5.09%, suggesting that analysts have recently become bullish on the company’s earnings prospects. This positive Earnings ESP, combined with the stock’s Zacks Rank #2 (Buy), indicates that another beat is likely just around the corner. We expect the company’s next earnings report to be released on July 26, 2024.

In the case of the Earnings ESP indicator, it is important to remember that a negative value reduces its predictive power; however, it is important to remember that a negative Earnings ESP does not indicate a divergence in earnings.

Many companies end up beating consensus EPS estimates, although that’s not the only reason their stocks appreciate. In addition, some stocks can remain stable even if they end up missing consensus estimates.

For this reason, it is very important to check a company’s Earnings ESP before its quarterly release to increase your chances of success. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they are released.

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