The Hackett Group (HCKT) AI Stock Analysis

• Market Cap: $719.10M
• Dividend Yield: 1.69%
• Average Volume (3M): 135.86K
• Price to Earnings (P/E): 25.3
• Beta (1Y): 0.86
• Revenue Growth: 3.96%
• EPS Growth: -31.63%
• Country: US
• Employees: 1,478
• Sector: Technology
• Sector Strength: 65
• Industry: Information Technology Services
• EPS (TTM): 0.41
• Shares Outstanding: 27,647,034
• 10 Day Avg. Volume: 133,852
• 30 Day Avg. Volume: 135,859
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.16
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $34.00
• Price Target Upside: 42.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

The Hackett Group's overall score reflects a strong financial foundation and strategic focus on AI, which are key strengths. However, technical indicators suggest caution, and the stock's valuation appears high. The earnings call and corporate events indicate potential for growth, but also highlight challenges in certain segments and increased expenses. The balanced risk-reward profile suggests a moderate outlook.

Positive Factors

Earnings

Hackett reported Q1/25 non-GAAP EPS of $0.41, which exceeded the forecast and the FactSet consensus forecast of $0.40.

Generative AI

The company is growing generative AI net revenue as implementation revenue grows, and Hackett introduced XPLR version 3, which expands its generative AI simulation capabilities.

Investment Rating

Analyst is maintaining an OUTPERFORM investment rating on HCKT shares with a 12-month price target of $32, indicating a potential upside of 23%.

Negative Factors

Earnings Forecast

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

Oracle Solutions Revenue

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 services and proprietary research and benchmarking services. Its primary revenue stream comes from providing strategic advisory and implementation services to businesses looking to enhance their operational processes and technology infrastructure. The company also earns income from licensing its intellectual property, including benchmarking data and best practices, which clients use to assess and improve their internal performance. Additionally, The Hackett Group benefits from ongoing client relationships and engagements, ensuring a steady flow of repeat business. Significant partnerships with technology providers and industry leaders enhance its service offerings and contribute to its ability to generate revenue.

The Hackett Group Financial Statement Overview

Summary

The Hackett Group shows strong revenue growth, excellent margins, and effective equity utilization. Despite slight margin fluctuations and decreased total assets, the company remains profitable and has low leverage, suggesting resilience and future growth potential.

Income Statement

The Hackett Group has demonstrated a robust revenue growth rate of 5.81% for the most recent year, coupled with healthy margins: a gross profit margin of 100% and a net profit margin of 9.44%. Despite a slight decline in EBIT and EBITDA margins compared to the previous year, the company remains profitable, with consistent growth in total revenue over the years, indicating strong market demand and operational efficiency.

Balance Sheet

The company's balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.03, showcasing low leverage risk. With a return on equity of 25.64%, The Hackett Group is effectively utilizing its equity to generate profits. The equity ratio stands at 60.22%, indicating a stable financial structure. However, the decrease in total assets and cash reserves warrants caution.

Cash Flow

The Hackett Group's cash flow performance is impressive, with a free cash flow growth rate of 31.08% and a high operating cash flow to net income ratio of 1.61. The free cash flow to net income ratio of 1.47 highlights strong cash generation capabilities. Despite significant financing outflows, the company maintains positive free cash flows, which is a strong indicator of financial health.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Mar 2021
Income Statement		Total Revenue
313.86M	296.59M	293.74M	278.81M	239.48M
	Gross Profit
123.24M	116.38M	115.58M	105.66M	73.11M
	EBIT
44.59M	49.26M	55.25M	46.48M	19.13M
	EBITDA
44.59M	52.68M	58.69M	50.85M	13.12M
	Net Income Common Stockholders
29.63M	34.15M	40.80M	41.55M	5.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.37M	20.96M	30.25M	45.79M	49.45M
	Total Assets
191.88M	181.43M	184.99M	207.54M	192.54M
	Total Debt
2.94M	34.42M	61.11M	3.77M	6.12M
	Net Debt
-13.42M	13.47M	30.85M	-42.02M	-43.33M
	Total Liabilities
76.30M	91.35M	126.72M	63.69M	51.66M
	Stockholders Equity
115.57M	90.08M	58.28M	143.85M	140.89M
Cash Flow		Free Cash Flow
43.65M	33.30M	54.25M	43.11M	42.17M
	Operating Cash Flow
47.73M	37.40M	58.90M	46.35M	44.06M
	Investing Cash Flow
-10.62M	-4.10M	-4.66M	-3.24M	-1.89M
	Financing Cash Flow
-41.66M	-42.56M	-69.74M	-46.74M	-18.71M

The Hackett Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

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 23.94 is below the 20-day moving average (MA) of 25.84, below the 50-day MA of 27.59, and below the 200-day MA of 27.96, indicating a bearish trend. The MACD of -0.64 indicates Negative momentum. The RSI at 29.40 is Positive, neither overbought nor oversold. The STOCH value of 66.21 is Neutral, 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
SAIC	78 Outperform	$5.72B	16.40	21.53%	1.22%	0.47%	-18.98%
CNXC	74 Outperform	$3.21B	12.61	6.34%	2.59%	21.67%	-17.91%
HCKT	70 Outperform	$719.10M	25.27	23.13%	1.69%	3.96%	-31.63%
TASK	64 Neutral	$1.26B	28.05	9.78%	―	7.64%	5.22%
III	61 Neutral	$191.57M	68.25	2.86%	4.53%	-14.93%	-54.76%
Sector *	60 Neutral	$10.77B	10.41	-6.71%	2.99%	7.69%	-13.12%
PSFE	55 Neutral	$886.44M	42.37	2.51%	―	6.48%	―

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.

Spark’s Take on HCKT Stock

According to Spark, TipRanks’ AI Analyst, HCKT is a Neutral.

The Hackett Group’s strong financial performance and strategic initiatives in AI and acquisitions are key strengths, but near-term technical weakness and a cautious earnings outlook temper enthusiasm. The stock is moderately valued, with some income appeal from dividends, suggesting a balanced risk-reward profile.

To see Spark’s full report on HCKT stock, click here.