10/15/2024
Government Contractor Valuation Tracker: H1 2024
Welcome to the sixth edition of our Government Contractor Valuation semi-annual update. This update includes key valuation indicators to help GovCon management teams and investors keep track of industry valuation benchmarks and trends. We will continue to update this information on a semi-annual basis.
In this latest Government Contractor Valuation tracker, we take a look at key valuation indicators such as government services composite, EV/TTM EBITDA H2 2023 lookback, S&P 500, and more.
The returns for this select group of public government services contractors* slightly underperformed the S&P 500 for June 2023 through June 2024. Over that period, the S&P 500 was up approximately 21.7%, compared to 18.2% for the government contractors. The continuing conflicts in the Middle East and Ukraine has led to increased defense spending, focus on cybersecurity, and investment in artificial intelligence; all affecting government contractors. Of note is GSA’s release of its “Generative AI and Specialized Computing Infrastructure Acquisition Resource Guide” to aid in procuring generative AI technologies.
Public government services contractors generally traded between 11.0x to 21.0x EBITDA. The median EBITDA multiple has remained stable over the last twelve months at around 15.0x.
*Contractors included in composite are: CACI, BAH, PSN, ICFI, LDOS, MMS, SAIC.
Jimmy Zhou
Senior Manager, Value360 - Valuation Advisory
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This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.