The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how government & technical consulting stocks fared in Q1, starting with UL Solutions (NYSE: ULS).
The sector has historically benefitted from steady government spending on defense, infrastructure, and regulatory compliance, providing firms long-term contract stability. However, the Trump administration is showing more willingness than previous administrations to upend government spending and bloat. Whether or not defense budgets get cut, the rising demand for cybersecurity, AI-driven defense solutions, and sustainability consulting should benefit the sector for years, as agencies and enterprises seek expertise in navigating complex technology and regulations. Additionally, industrial automation and digital engineering are driving efficiency gains in infrastructure and technical consulting projects, which could help profit margins.
The 8 government & technical consulting stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.6%.
Thankfully, share prices of the companies have been resilient as they are up 5% on average since the latest earnings results.
UL Solutions (NYSE: ULS)
Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions (NYSE: ULS) provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.
UL Solutions reported revenues of $705 million, up 5.2% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS estimates.
Interestingly, the stock is up 18.6% since reporting and currently trades at $70.98.
Is now the time to buy UL Solutions? Access our full analysis of the earnings results here, it’s free.
Best Q1: Maximus (NYSE: MMS)
With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE: MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.
Maximus reported revenues of $1.36 billion, flat year on year, outperforming analysts’ expectations by 5.2%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
Maximus scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 4% since reporting. It currently trades at $69.89.
Is now the time to buy Maximus? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Booz Allen Hamilton (NYSE: BAH)
With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE: BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.
Booz Allen Hamilton reported revenues of $2.97 billion, up 7.3% year on year, falling short of analysts’ expectations by 1.8%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ full-year EPS guidance estimates.
Booz Allen Hamilton delivered the weakest full-year guidance update in the group. As expected, the stock is down 18.6% since the results and currently trades at $105.
Read our full analysis of Booz Allen Hamilton’s results here.
SAIC (NASDAQ: SAIC)
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ: SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
SAIC reported revenues of $1.88 billion, up 1.6% year on year. This result surpassed analysts’ expectations by 0.6%. Zooming out, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates and a slight miss of analysts’ full-year EPS guidance estimates.
The stock is down 3.2% since reporting and currently trades at $111.73.
Read our full, actionable report on SAIC here, it’s free.
ICF International (NASDAQ: ICFI)
Operating at the intersection of policy, technology, and implementation for over five decades, ICF International (NASDAQ: ICFI) provides professional consulting services and technology solutions to government agencies and commercial clients across energy, health, environment, and security sectors.
ICF International reported revenues of $487.6 million, down 1.4% year on year. This print met analysts’ expectations. It was a very strong quarter as it also logged an impressive beat of analysts’ EPS estimates.
ICF International had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $84.94.
Read our full, actionable report on ICF International here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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