Booz Allen Hamilton (BAH) Shares Plunge 2.3% Amid Revised Guidance and 7% Workforce Cut in Civil Business

Booz Allen Hamilton (BAH) shares fell 2.3% on Monday, marking their lowest close since May 2023, with an intraday decline of 3.32%. The selloff came amid renewed investor skepticism over the company’s financial outlook and strategic adjustments in its civil business segment.

The stock’s underperformance follows a downward revision to fiscal 2026 guidance, with the firm projecting adjusted earnings per share of $6.20–$6.55 and revenue of $12.0–$12.5 billion. These figures fell short of analyst expectations of $6.92 EPS and $12.82 billion in revenue, signaling reduced confidence in the company’s ability to sustain growth, particularly in its civil government contracts. The gap between management’s projections and market forecasts highlighted structural challenges, including weaker demand and operational inefficiencies.

Compounding concerns, Booz Allen announced a 7% workforce reduction in its civil business—approximately 2,500 employees—as part of a broader restructuring driven by federal cost-cutting initiatives. CEO Horacio Rozanski attributed the layoffs to aligning resources with “anticipated demand” in a sector increasingly impacted by reduced government spending. While the defense and intelligence segments remain growth drivers, the civil business’s contraction raises questions about long-term profitability and operational flexibility.

Broader industry dynamics also weigh on the stock. The Consulting Services sector faces headwinds, with Booz Allen’s PEG ratio of 1.61 suggesting it is overvalued relative to peers. Despite a stable full-year 2025 outlook, including modest earnings and revenue growth, the company’s strategic pivot toward higher-margin defense work has yet to offset near-term volatility. Analysts remain cautious, with the Zacks Rank of #3 (Hold) reflecting limited upside potential ahead of the October 24 earnings report.

Investors are closely monitoring how effectively the firm executes its restructuring and navigates a shifting regulatory landscape. Until then, BAH’s stock remains vulnerable to further declines amid lingering uncertainty about its civil business trajectory and ability to meet revised financial targets.