Huron Consulting (HURN) AI Stock Analysis

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Huron Consulting

(NASDAQ:HURN)

80Outperform

Huron Consulting's strong financial performance, characterized by robust revenue growth and improved profitability, forms the backbone of its stock appeal. Technical indicators show positive momentum, though caution is advised due to overbought signals. Valuation metrics suggest the stock is fairly valued with growth potential. The earnings call underscored a favorable outlook, tempered by some challenges in specific segments. Overall, the company is well-positioned for continued success, though vigilance regarding sector-specific challenges is warranted.

Positive Factors

Client Relationships

Huron Consulting Group is a high-quality consulting firm with a strong culture and durable client relationships, achieving less than 10% voluntary consultant attrition, which is lower than the industry average.

Revenue Growth

The company has highlighted its integrated go-to-market strategy as a competitive differentiator against larger firms, accelerating revenue growth and increasing client engagement.

Negative Factors

Investor Confidence

There are concerns about the accuracy and completeness of some factual statements, which could affect investor confidence.

Project Timing

The only headwinds for Huron are reflected in the near-term timing of some digital projects.

Huron Consulting (HURN) vs. S&P 500 (SPY)

Market Cap

$2.45B

Dividend YieldN/A

Average Volume (3M)296.61K

Price to Earnings (P/E)21.6

Beta (1Y)0.46

Revenue Growth8.80%

EPS Growth97.52%

CountryUS

Employees7,230

SectorIndustrials

Sector Strength61

IndustryConsulting Services

Share Statistics

EPS (TTM)6.29

Shares Outstanding17,921,211

10 Day Avg. Volume330,056

30 Day Avg. Volume296,610

Financial Highlights & Ratios

PEG Ratio0.22

Price to Book (P/B)N/A

Price to Sales (P/S)1.64

Price to Cash Flow (P/CF)4.50

P/FCF Ratio4.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$165.67

Price Target Upside14.96% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Huron Consulting Business Overview & Revenue Model

Company DescriptionHuron Consulting Group Inc., a professional services firm, provides consultancy services in the United States and internationally. It operates through three segments: Healthcare, Business Advisory, and Education. The Healthcare segment provides advisory services in the areas of financial and operational improvement, care transformation, and revenue cycle managed services; organizational transformation; and digital, technology and analytic solutions to national and regional hospitals, integrated health systems, academic medical centers, community hospitals, medical groups, and health plans. The Business Advisory segment offers cloud-based technology, analytics, restructuring, and capital advisory solutions to life science, financial, healthcare, education, energy and utilities, and industrials and manufacturing industries, as well as to public sectors. The Education segment provides research enterprise and student lifecycle; digital, technology and analytic solutions; and organizational transformation services to public and private colleges and universities, academic medical centers, research institutes, and other not-for-profit organizations. Huron Consulting Group Inc. was incorporated in 2002 and is headquartered in Chicago, Illinois.

How the Company Makes MoneyHuron Consulting makes money primarily through the provision of consulting services, which is its main revenue stream. The company earns fees by engaging in projects with clients in diverse industries such as healthcare, education, and life sciences, where it provides strategic advice and solutions to improve performance and efficiency. Revenue is typically generated on a project basis, with fees depending on the scope and duration of each engagement. Additionally, Huron may have long-term contracts or retainer agreements with some clients, which provide a steady income. The company's earnings are further influenced by its ability to maintain strong client relationships and secure repeat business, as well as its investments in expanding service offerings and geographic reach.

Huron Consulting Financial Statement Overview

Summary

Huron Consulting exhibits strong financial performance with consistent revenue growth, improved profitability, and effective cash flow management. The company has successfully reduced its financial leverage, enhancing its balance sheet stability. While there are minor areas for improvement in operating efficiency and managing increasing liabilities, the overall financial health of the company is solid, positioning it well for future growth.

Income Statement

Very Positive

Huron Consulting has demonstrated strong revenue growth over the past few years, with a notable increase from $1,398 million in 2023 to $1,522 million in 2024, reflecting a growth rate of approximately 8.76%. The company maintains a healthy gross profit margin of 100%, indicating effective cost management. The net profit margin improved significantly from 4.47% in 2023 to 7.66% in 2024, driven by increased net income. However, the EBIT margin decreased slightly to 11.10% in 2024, and the EBITDA margin stood at 10.09%. Overall, the income statement reflects solid profitability and growth, with room for improvement in operating efficiency.

Balance Sheet

Positive

The balance sheet reveals a stable financial position for Huron Consulting, with an equity ratio of 41.78% in 2024, indicating a balanced capital structure. The debt-to-equity ratio improved significantly to 0.10 in 2024, suggesting reduced financial leverage. Return on equity (ROE) increased to 20.78% in 2024, showcasing strong shareholder value creation. Despite these strengths, the total liabilities have been increasing, which could pose future risks if not managed carefully.

Cash Flow

Very Positive

Huron Consulting's cash flow statement shows robust free cash flow growth, with a dramatic increase from $100 million in 2023 to $193 million in 2024. The operating cash flow to net income ratio is strong at 1.73, highlighting effective cash generation from operations. Additionally, the free cash flow to net income ratio is notably high at 1.65, reflecting efficient capital expenditure management. While the company has shown excellent cash flow management, continued focus on sustaining cash flow growth is essential.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.52B	1.40B	1.16B	926.96M	871.01M
	Gross Profit
1.52B	419.29M	346.41M	268.81M	251.67M
	EBIT
168.82M	125.35M	99.76M	78.04M	131.53M
	EBITDA
204.03M	161.84M	154.19M	120.64M	12.82M
	Net Income Common Stockholders
116.63M	62.48M	75.55M	62.99M	-23.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
21.91M	12.15M	11.83M	20.78M	67.18M
	Total Assets
1.34B	1.26B	1.20B	1.12B	1.06B
	Total Debt
55.75M	373.88M	346.09M	297.24M	273.88M
	Net Debt
33.84M	361.73M	334.25M	276.45M	206.70M
	Total Liabilities
782.29M	729.25M	647.00M	547.45M	505.53M
	Stockholders Equity
561.33M	532.89M	552.04M	571.90M	551.94M
Cash Flow		Free Cash Flow
192.67M	100.08M	61.10M	2.23M	120.34M
	Operating Cash Flow
201.32M	135.26M	85.40M	17.99M	136.74M
	Investing Cash Flow
-79.75M	-36.65M	-20.13M	-20.14M	-42.03M
	Financing Cash Flow
-111.64M	-98.33M	-74.11M	-44.41M	-39.62M

Huron Consulting Technical Analysis

Technical Analysis Sentiment

Negative

Last Price144.11

Price Trends

50DMA

138.26

Negative

100DMA

130.92

Positive

200DMA

119.00

Positive

Market Momentum

MACD

1.67

Positive

RSI

52.30

Neutral

STOCH

26.09

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HURN, the sentiment is Negative. The current price of 144.11 is below the 20-day moving average (MA) of 144.14, above the 50-day MA of 138.26, and above the 200-day MA of 119.00, indicating a neutral trend. The MACD of 1.67 indicates Positive momentum. The RSI at 52.30 is Neutral, neither overbought nor oversold. The STOCH value of 26.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HURN.

Huron Consulting Risk Analysis

Huron Consulting disclosed 34 risk factors in its most recent earnings report. Huron Consulting reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Huron Consulting Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HURN	80 Outperform	$2.45B	21.56	21.32%	―	8.80%	97.52%
BAH	75 Outperform	$13.60B	16.01	75.34%	1.95%	14.07%	116.33%
CRAI	75 Outperform	$1.10B	24.01	21.96%	1.13%	10.17%	24.74%
FCN	72 Outperform	$5.80B	20.68	13.21%	―	6.00%	-1.49%
ICFI	66 Neutral	$1.51B	14.05	11.60%	0.68%	2.88%	33.76%
Sector *	62 Neutral	$7.67B	13.25	3.04%	3.47%	3.63%	-13.99%
EXPO	61 Neutral	$4.05B	37.75	28.05%	1.50%	4.05%	8.71%

* Industrials Sector Average

Performance Comparison

HURN

Huron Consulting

144.11

50.42

53.82%

BAH

Booz Allen

108.07

-32.54

-23.14%

CRAI

Cra International

170.60

26.65

18.51%

EXPO

Exponent

79.79

1.93

2.48%

FCN

FTI Consulting

161.59

-45.69

-22.04%

ICFI

Icf International

83.24

-59.00

-41.48%

Huron Consulting Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 14.98% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Neutral

The call highlighted strong financial performance with record revenues and growth in key segments like Healthcare and Education. However, challenges such as commercial segment declines, regulatory pressures in education, and healthcare margin issues suggest a balanced sentiment.

Highlights

Record Revenue and Growth

The fourth quarter of 2024 produced record revenues before reimbursable expenses (RBR) with a 14.5% increase, and the full year RBR grew by 9.1% over 2023. The company achieved high single-digit or better RBR growth for the fourth consecutive year.

Strong Performance in Healthcare Segment

The Healthcare segment achieved record RBR of $756 million, growing 12% over 2023. The segment posted an 18% growth in the fourth quarter, driven by strong demand across various offerings.

Education Segment Growth

Education segment RBR increased 10.4% year-over-year to a record $474.2 million, with strong demand for digital, strategy, and operations offerings.

Successful Capital Return

Huron returned over $122 million of capital to shareholders via share repurchases, and the stock price increased by 21% in 2024.

Improved Adjusted EBITDA Margins

Adjusted EBITDA as a percentage of RBR increased by 120 basis points to 13.5% in 2024, marking the fourth consecutive year of expanded margins.

Lowlights

Challenges in the Commercial Segment

Full year 2024 Commercial segment RBR declined 1% year-over-year, with reduced demand for strategy, innovation, and digital offerings.

Regulatory Challenges in Education

Higher education faces a disruptive regulatory environment, with potential reductions in federal research funding and changes to tax exemptions affecting financial stability.

Healthcare Industry Margin Pressures

Declining provider margins in the healthcare industry due to increased labor and supply costs are likely to continue, impacting financial sustainability.

Company Guidance

In the call discussing Huron Consulting Group's financial results for the fourth quarter and full year 2024, the company provided guidance for 2025, expecting revenues before reimbursable expenses (RBR) to range from $1.58 billion to $1.66 billion, indicating a 9% growth at the midpoint. The adjusted EBITDA margin is projected to be between 14% and 14.5%, a 75 basis point improvement over 2024. Adjusted diluted earnings per share (EPS) are anticipated to be between $6.80 and $7.60, reflecting an 11.3% increase compared to 2024. Huron expects to achieve mid-single-digit revenue growth in the Healthcare segment, mid to upper-single-digit growth in the Education segment, and low 20% growth in the Commercial segment. The company also anticipates operating cash flows between $195 million to $235 million, with capital expenditures around $35 million to $45 million. This guidance reflects Huron's strategic focus on leveraging market positions in healthcare and education, expanding in commercial industries, and enhancing digital capabilities amidst a dynamic regulatory environment.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.