The Hackett Group (HCKT) AI Stock Analysis

• Market Cap: $559.29M
• Dividend Yield: 2.17%
• Average Volume (3M): 273.12K
• Price to Earnings (P/E): 34.0
• Beta (1Y): 0.84
• Revenue Growth: 4.18%
• EPS Growth: -51.62%
• Country: US
• Employees: 1,618
• Sector: Technology
• Sector Strength: 94
• Industry: Information Technology Services
• EPS (TTM): 0.38
• Shares Outstanding: 27,510,689
• 10 Day Avg. Volume: 447,239
• 30 Day Avg. Volume: 273,124
• PEG Ratio: -2.01
• Price to Book (P/B): 7.36
• Price to Sales (P/S): 2.71
• P/FCF Ratio: 19.49
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 2.33
• Enterprise Value/Gross Profit: 6.04
• Enterprise Value/Ebitda: 17.59
• 1Y Price Target: $26.75
• Price Target Upside: 31.97% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 64 Neutral
• Price Target: $22.00 ▲(8.53% Upside)

The Hackett Group's overall stock score reflects a strong financial performance and promising earnings call insights, particularly in the Gen AI segment. However, technical analysis indicates bearish momentum, and the valuation suggests the stock may be overvalued. These factors combined result in a moderate overall score.

Positive Factors

Financial Performance

Adjusted EBITDA exceeded forecasts by 13%, showcasing strong financial performance.

Generative AI Innovation

The company is introducing a new version of its AI solutions, showcasing innovation in generative AI.

Revenue Growth

The company reported total net revenue of $77.6 million, which exceeded both the forecast and the FactSet consensus forecast.

Negative Factors

Economic Headwinds

Reducing 2025 and 2026 non-GAAP EPS forecasts to reflect incremental economic headwinds.

Oracle Solutions Performance

Oracle Solutions net revenue declined 8% year-over-year due to the wind down of a large project.

Sales Cycle Challenges

Economic uncertainty is causing longer sales cycles in certain business segments.

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 primarily through its consulting services, which include strategic advisory, benchmarking studies, and operational improvement consulting for enterprises. The company charges fees for its consulting engagements, which can be project-based or retainer-based, depending on the client's needs. Additionally, Hackett offers subscription-based access to its proprietary research and benchmarking databases, providing clients with valuable insights and data to guide their decision-making processes. Significant partnerships with large enterprises and a strong reputation in the consulting industry also contribute to its earnings, as they help attract new clients and retain existing ones.

The Hackett Group Financial Statement Overview

Summary

The Hackett Group demonstrates a strong financial position with healthy revenue growth, efficient operations, and solid cash flow management. Minor fluctuations in profitability margins and ROE are offset by low leverage and effective capital utilization.

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	Dec 2020
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
EBITDA	41.61M	48.51M	52.68M	58.69M	50.85M	13.12M
Net Income	24.04M	29.63M	34.15M	40.80M	41.55M	5.47M
Balance Sheet
Total Assets	191.76M	191.88M	181.43M	184.99M	207.54M	192.54M
Cash, Cash Equivalents and Short-Term Investments	9.18M	16.37M	20.96M	30.25M	45.79M	49.45M
Total Debt	20.88M	15.68M	34.42M	61.11M	3.77M	6.12M
Total Liabilities	77.34M	76.30M	91.35M	126.72M	63.69M	51.66M
Stockholders Equity	114.42M	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: 20.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 20.27 is below the 20-day moving average (MA) of 22.19, below the 50-day MA of 23.70, and below the 200-day MA of 27.37, indicating a bearish trend. The MACD of -1.00 indicates Positive momentum. The RSI at 28.65 is Positive, neither overbought nor oversold. The STOCH value of 29.05 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	74 Outperform	$5.50B	16.43	21.63%	1.26%	3.39%	-16.78%
CNXC	70 Outperform	$3.08B	13.41	5.59%	2.76%	11.31%	-16.02%
TASK	70 Outperform	$1.55B	25.63	12.49%	―	19.04%	24.49%
HCKT	64 Neutral	$559.29M	33.95	15.27%	2.17%	4.18%	-51.62%
III	62 Neutral	$239.53M	31.84	8.29%	3.62%	-9.86%	―
Sector *	62 Neutral	£500.82M	27.12	0.85%	2.82%	3.88%	-21.07%
PSFE	58 Neutral	$818.80M	39.11	-5.88%	―	0.47%	-292.02%

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.