Fundamental impact
The WAEDS contract adds a $1.58 billion ceiling over five years – roughly $316 million of contract revenue each year. At Booz Allen’s FY‑2024 revenue of about $7.9 billion, the new work represents a ~4 % boost to top‑line growth in each of the next five fiscal years. Because the work is high‑margin intelligence‑analysis and data‑science work, it should contribute a margin in the 13‑15 % range (consistent with Booz Allen’s historical contract‑type mix). Management will therefore be able to lift its FY‑2025 and FY‑2026 revenue guidance by roughly 3‑5 % and, given the contract’s high profitability, increase adjusted EPS by a similar 3‑4 % after accounting for incremental SG&A and R&D spend. In practice we can expect the company to raise its FY‑2025 revenue forecast to roughly $8.3‑$8.5 billion and its FY‑2025 adjusted EPS to roughly $11.00‑$11.30 (versus the current $10.70 consensus). The upside is not just the incremental revenue; the contract also deepens Booz Allen’s footprint in the CWMD market, creating cross‑sell opportunities that could add a further 0.5‑1 % incremental revenue through follow‑on work.
Market & trading implications
The market has already priced in a modest boost (the news carries a strong positive sentiment score of 85). Technically, the stock has broken above its 50‑day EMA and is holding above the 200‑day EMA, with the 20‑day RSI hovering near 55 – a neutral‑to‑bullish stance. Volume has surged ~30 % on the news, and the price is testing a short‑term resistance near $138‑$140. Given the earnings uplift, a revised earnings forecast, and the bullish technical set‑up, the stock appears poised for a 4‑6 % upside in the next 4‑6 weeks. Traders could consider a buy‑on‑dip strategy if the price pulls back to the 20‑day EMA (~$132) with a stop just below the 200‑day EMA (~$126) and target the $140‑$145 range as the earnings revision rolls out. The upside risk is limited to a potential re‑rating of the contract’s timing or scope, which would be reflected in a short‑term correction, but the long‑term revenue and earnings uplift makes the bullish case compelling.