NEW YORK (TheStreet) -- Booz Allen Hamilton Holding (BAH) stock is lower Thursday after the management and consulting firm announced the sale of 10 million shares of its common stock by an affiliate of The Carlyle Group. Booz Allen will not receive any of the proceeds from the offering.
The shares will be sold to Citigroup Global Markets and Barclays Capital, the underwriters of the offering. Citigroup and Barclays then propose to offer the sale of the shares from time to time.
At the offering's conclusion, Carlyle will own around 45.8% of outstanding stock. The offering is expected to close and settle on June 3.
By midday, shares had tumbled 6.5% to $22.10.
TheStreet Ratings team rates BOOZ ALLEN HAMILTON HLDG CP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOOZ ALLEN HAMILTON HLDG CP (BAH) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, BAH's share price has jumped by 27.42%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BAH should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market, BOOZ ALLEN HAMILTON HLDG CP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- BOOZ ALLEN HAMILTON HLDG CP's earnings per share declined by 18.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BOOZ ALLEN HAMILTON HLDG CP increased its bottom line by earning $1.54 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.54).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 16.4%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 9.67 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, BAH's quick ratio is somewhat strong at 1.28, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: BAH Ratings Report