Defense IT contractor Booz Allen Hamilton (BAH -0.33%) delivered a quarterly beat, but its guidance was a little short of heightened expectations.

Investors are stepping away from the stock, sending shares down as much as 6% at the open and down 2.5% as of 10:30 a.m. ET.

Signs of weakness

Booz Allen Hamilton provides IT and other services primarily to military and civilian government agencies. The stock was trending higher for most of the last year on a series of strong earnings reports, but post-election uncertainty about government spending has caused a pullback since November.

The latest results and commentary are unlikely to quell concerns. Booz Allen earned $1.55 per share on revenue of $2.92 billion in its fiscal third quarter ending Dec. 31, besting the $1.52 per share on sales of $2.87 billion consensus estimate. But the underlying metrics were mixed.

Booz and its rivals staff up ahead of future contracts, so investors track head count closely. The company's staffing was flat compared to the prior quarter, down from strong growth earlier in the fiscal year. And the book-to-bill ratio, a measure of future business relative to current billings, was a soft 0.37x.

Is Booz Allen Hamilton Stock a buy?

Booz raised its full-year 2025 revenue guidance to be up 12% to 13%, from 11% to 13%. Wall Street is on the high side, with the consensus expecting 13% full-year growth. The company also raised the lower end of its earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flow guidance.

In short, there is nothing wrong with Booz Allen Hamilton, and the company is still well positioned for long-term growth. But in the current political climate, there are few near-term catalysts for defense stocks and a lot of uncertainty. This could be an attractive entry point, but patience will be required.