BAH
Booz Allen Hamilton Holding Corporation
$72.20
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 10.3% below fair value
You pay
$72.20
Bear
$70.95
Fair
$80.48
Bull
$91.23
Bear
$70.95
-1.7%
3% stage 1 growth, 11% discount
Fair
$80.48
+11.5%
4% stage 1 growth, 11% discount
Bull
$91.23
+26.4%
6% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
34%
Implied Market Multiple
13.4x
Market is pricing in (growth)
3.5%
vs 4.2% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $89.71 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $80.48 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions