Why TD's Analyst Think This Mid-Cap Stock May Rally, It Is Up 10% Today Already

• The analyst said that Booz Allen's stock may rally given high short interest and a "better than feared" Q3 report.
• Booz Allen reported adjusted earnings per share of $1.77 for the third quarter, jumping 14% up from the same quarter a year ago. 
• The company said it hit a record Q3 backlog of $38 billion. 

Booz Allen Hamilton Holding (BAH) shares rallied on Friday after its third-quarter (Q3) profit beat analysts' expectations that cushioned a hit from its revenue decline during the quarter. 

TD Cowen said in a note that the company's Q3 adjusted earnings per share (EPS) beat expectations due to a lower tax rate and better margin that offset a 4.7% sales miss. The analyst added that Booz Allen's stock may rally, given high short interest and a "better than feared" Q3 report. 

TD has a 'Hold' rating and a $105 price target on BAH shares. 

Profit Beat Offsets Revenue Drop

The company reported adjusted EPS of $1.77 for the third quarter, jumping up 14% from the same quarter last year. It significantly exceeded analyst estimates of $1.29, according to data from Fiscal. 

However, the company's revenue fell 10.2% year-on-year to $2.6 billion, below analysts' projections of $2.76 billion. The company noted revenue decline was primarily driven by the impact of a slowed procurement and funding environment, including the government shutdown that occurred in the third quarter of fiscal 2026. These factors drove a decrease in headcount, as well as a decline in billable expenses. 

The company said it hit record Q3 backlog of $38 billion and quarterly book-to-bill ratio of 0.3x.

"Booz Allen's third quarter results are on track and reflect disciplined execution in a dynamic environment," said Horacio Rozanski, Booz Allen Chairman and CEO.

How Did Stocktwits Users React?

Retail sentiment around BAH trended in 'bullish' territory amid 'high' message volume. 

Shares in the company have fallen 28% over the past 12 months.  

MENAFN23012026007385015968ID1110642807