The Hackett Group (HCKT) AI Stock Analysis

• Market Cap: $654.88M
• Dividend Yield: 2.03%
• Average Volume (3M): 178.96K
• Price to Earnings (P/E): 27.7
• Beta (1Y): 0.86
• Revenue Growth: 3.96%
• EPS Growth: -31.63%
• Country: US
• Employees: 1,618
• Sector: Technology
• Sector Strength: 82
• Industry: Information Technology Services
• EPS (TTM): 0.41
• Shares Outstanding: 27,655,226
• 10 Day Avg. Volume: 183,222
• 30 Day Avg. Volume: 178,958
• PEG Ratio: -1.47
• Price to Book (P/B): 6.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.50
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 0.55
• Enterprise Value/Gross Profit: 5.64
• Enterprise Value/Ebitda: 3.50
• 1Y Price Target: $33.50
• Price Target Upside: 41.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 64 Neutral
• Price Target: $26.00 ▲(9.80%Upside)

The Hackett Group's strong financial performance and strategic focus on AI are significant positives. However, bearish technical indicators and a high valuation relative to peers present risks. Investment in AI and solid revenue growth offer potential upside, balancing the overall outlook.

Positive Factors

Acquisition and Integration

The acquisition of LeewayHertz led to the combination of Hackett’s generative AI assessment and simulation capabilities with advanced solution and implementation capabilities, resulting in an end-to-end consulting capability.

Financial Performance

The company's top line exceeds forecasts with total net revenue beating both individual and consensus forecasts by 4%.

Investment Rating

The company is maintaining its OUTPERFORM investment rating and has increased its 12-month price target from $28 to $36.

Negative Factors

EPS Forecast Reduction

Reducing 2025 and 2026 non-GAAP EPS forecasts to $1.70 and $1.84 from previous estimates.

Revenue Decline

Oracle Solutions net revenue, comprising 27% of Q1/25 net revenue, declined 3% year-over-year due to the wind-down of a large project.

The Hackett Group Business Overview & Revenue Model

Company Description

The Hackett Group, Inc. operates as a strategic advisory and technology consulting firm primarily in North America and internationally. It offers best practice intelligence center, an online searchable repository; best practice accelerators that provide web-based access to best practices, customized software configuration tools, and best practice process flows; advisor inquiry for access to fact-based advice on proven approaches and methods; best practice research that provides insights into the proven approaches; and peer interaction comprising member-led webcasts, annual best practice conferences, annual member forums, membership performance surveys, and client-submitted content, as well as intellectual property as-a-service and Hackett Institute programs. The company's benchmarking services conduct studies for selling, general and administrative, finance, human resources, information technology, procurement, enterprise performance management, and shared services; and business transformation practices to help clients develop coordinated strategy for achieving performance enhancements across the enterprise. It also provides Oracle EEA solutions for core financial close and consolidation, integrated business planning, and reporting/advanced analytics areas. In addition, the company offers SAP solutions, including planning, architecture, and vendor evaluation and selection through implementation, customization, testing, and integration; post-implementation support, change management, exception management, process transparency, system documentation, and end-user training; off-shore application development, and application maintenance and support services; and OneStream practice that helps clients choose and deploy OneStream XF Platform and Market Place solutions. The company was formerly known as Answerthink, Inc. and changed its name to The Hackett Group, Inc. in 2008. The Hackett Group, Inc. was founded in 1991 and is headquartered in Miami, Florida.

How the Company Makes Money

The Hackett Group generates revenue through a combination of consulting fees, subscription fees for its executive advisory programs, and sales of its proprietary software solutions. Consulting services represent a significant portion of its revenue, where the company charges clients for expert guidance on improving business processes and implementing digital transformation strategies. Additionally, Hackett benefits from recurring income through subscriptions to its benchmarking and advisory services, which provide clients with ongoing access to research, best practices, and performance metrics. The company's software tools, designed to facilitate process automation and efficiency, further contribute to its revenue streams. Key partnerships with technology providers and alliances with industry leaders also enhance its service offerings, helping to attract and retain a diverse clientele.

The Hackett Group Financial Statement Overview

Summary

The Hackett Group demonstrates solid financial health with consistent revenue growth and robust operational efficiency. Despite minor declines in net profit margin and ROE, the company maintains a strong cash flow position and low leverage, positioning it well within its industry.

Income Statement

The Hackett Group shows a healthy financial performance with stable revenue growth over the years, reflected in a notable increase from $239.48 million in 2021 to $314.53 million in the TTM. Gross profit margin remains robust, though there's a slight drop in net profit margin recently due to increased expenses. Despite this, EBIT and EBITDA margins are stable, indicating consistent operational efficiency.

Balance Sheet

The company's balance sheet is solid, with a decreasing debt-to-equity ratio, currently at a low level due to declining total debt. The equity ratio is strong, reflecting sound financial health and low leverage risk. Return on Equity (ROE) has slightly decreased but remains competitive, demonstrating effective use of equity.

Cash Flow

Cash flow analysis shows positive trends with consistent free cash flow generation, indicating strong cash management. Operating cash flow to net income ratio is favorable, showing efficient cash conversion from earnings. Despite fluctuations in financing cash flow, the company maintains a stable free cash flow to net income ratio, highlighting its ability to sustain operations and investments.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Mar 2021
Income Statement		Total Revenue
314.53M	313.86M	296.59M	293.74M	278.81M	239.48M
	Gross Profit
121.13M	123.24M	116.38M	115.58M	105.66M	73.11M
	EBIT
37.47M	44.59M	49.26M	55.25M	46.48M	19.13M
	EBITDA
41.61M	48.51M	52.68M	58.69M	50.85M	13.12M
	Net Income Common Stockholders
24.04M	29.63M	34.15M	40.80M	41.55M	5.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
25.95M	16.37M	20.96M	30.25M	45.79M	49.45M
	Total Assets
193.74M	191.88M	181.43M	184.99M	207.54M	192.54M
	Total Debt
7.96M	15.68M	34.42M	61.11M	3.77M	6.12M
	Net Debt
-17.99M	-690.00K	13.47M	30.85M	-42.02M	-43.33M
	Total Liabilities
56.12M	76.30M	91.35M	126.72M	63.69M	51.66M
	Stockholders Equity
137.61M	115.57M	90.08M	58.28M	143.85M	140.89M
Cash Flow		Free Cash Flow
44.46M	43.65M	33.30M	54.25M	43.11M	42.17M
	Operating Cash Flow
49.13M	47.73M	37.40M	58.90M	46.35M	44.06M
	Investing Cash Flow
-11.22M	-10.62M	-4.10M	-4.66M	-3.24M	-1.89M
	Financing Cash Flow
-41.57M	-41.66M	-42.56M	-69.74M	-46.74M	-18.71M

The Hackett Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCKT, the sentiment is Negative. The current price of 23.68 is below the 20-day moving average (MA) of 24.58, below the 50-day MA of 25.28, and below the 200-day MA of 27.88, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 36.15 is Neutral, neither overbought nor oversold. The STOCH value of 11.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HCKT.

The Hackett Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TASK	81 Outperform	$1.49B	28.22	11.35%	―	14.05%	17.90%
CNXC	76 Outperform	$3.40B	13.31	6.34%	2.50%	21.67%	-17.91%
SAIC	68 Neutral	$4.91B	14.66	21.63%	1.41%	3.39%	-16.78%
III	67 Neutral	$228.49M	30.84	8.09%	3.80%	-12.26%	―
HCKT	64 Neutral	$654.88M	27.74	23.13%	2.03%	3.96%	-31.63%
Sector *	62 Neutral	$11.95B	9.93	-7.21%	4.85%	7.32%	-8.25%
PSFE	57 Neutral	$721.49M	39.11	-0.04%	―	3.50%	95.90%

The Hackett Group Corporate Events

The Hackett Group Reports Strong Q1 2025 Results

On May 1, 2025, The Hackett Group held its Annual Meeting of Shareholders, where key decisions included the election of directors and amendments to the company’s stock option plan. The company also announced its first quarter 2025 financial results, reporting revenues near the high end of guidance and highlighting the release of AI XPLR version 3, which is expected to enhance growth in the Gen AI sector. Despite a decrease in GAAP earnings per share due to non-cash compensation expenses, the company showed strong cash flow and continued investment in AI capabilities, positioning itself for future growth.