Key Stats for Booz Allen Hamilton Stock
- 1- Year Price Change for BAH stock: -31%
- $BAH Share Price as of Jan. 26: $94
- 52-Week High: $136
- $BAH Share Price Target: $106
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What Happened?
Booz Allen Hamilton (BAH) stock fell sharply on Monday after Treasury Secretary Scott Bessent announced the cancellation of all Treasury Department contracts with the consulting firm.
The move comes in response to a 2018-2020 data breach where a Booz Allen employee leaked confidential tax records of President Donald Trump and billionaires Jeff Bezos and Elon Musk to media outlets.
- The Treasury Department currently holds 31 separate contracts with Booz Allen Hamilton, totaling $4.8 million in annual spending and $21 million in total obligations.
- While these contracts represent a small fraction of the company’s overall revenue, the announcement sent BAH stock tumbling more than 10% before recovering slightly.
“President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” Bessent said in a statement.
He added that “Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service.”
The data breach affected approximately 406,000 taxpayers, according to the IRS.
Charles Edward Littlejohn, a former Booz Allen employee, pleaded guilty in October 2023 to one count of disclosure of tax return information.
He admitted to leaking Trump’s tax records to The New York Times and records of wealthy individuals to ProPublica. Littlejohn was sentenced to the maximum term of five years in prison in January 2024.
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What the Market Is Telling Us About BAH Stock
The sharp decline in BAH stock reflects investor concerns about potential reputational damage and the possibility of additional contract cancellations from other government agencies.
While the $4.8 million in annual Treasury contracts is small compared to Booz Allen’s $11.3 billion in expected revenue for fiscal year 2026, the symbolic nature of the cancellation could have broader implications.
Booz Allen issued a statement Monday defending its position: “We have consistently condemned in the strongest possible terms the actions of Charles Littlejohn, who was active with the company years ago.”
The company emphasized that Littlejohn’s criminal conduct occurred on government systems, not Booz Allen systems, and that the firm “stores no taxpayer data on its systems and has no ability to monitor activity on government networks.”
The company also noted it “fully supported the U.S. government in its investigation, and the government expressed gratitude for our assistance, which led to Littlejohn’s prosecution.”
However, investors appear skeptical about whether this explanation will be sufficient to prevent further fallout.
- The timing is particularly challenging given that Booz Allen just reported third-quarter earnings showing continued weakness in its civil business, which declined 28% year-over-year.
- The company’s national security portfolio, which includes defense and intelligence work, has been a bright spot with approximately 4% growth when adjusting for the recent government shutdown.
Despite the setback, Booz Allen’s fundamentals remain relatively strong. The company ended the quarter with a record backlog of over $38 billion and a qualified pipeline for fiscal year 2027 of nearly $53 billion, up 12% from the prior year.
Management has also been executing a cost reduction program that should improve margins in fiscal year 2027.
Still, BAH stock faces near-term uncertainty as investors wait to see if other agencies follow Treasury’s lead or if the cancellation remains an isolated incident.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
