The Hackett Group (HCKT) AI Stock Analysis

• Market Cap: $571.12M
• Dividend Yield: 2.22%
• Average Volume (3M): 316.27K
• Price to Earnings (P/E): 34.0
• Beta (1Y): 0.81
• Revenue Growth: 4.18%
• EPS Growth: -51.62%
• Country: US
• Employees: 1,618
• Sector: Technology
• Sector Strength: 83
• Industry: Information Technology Services
• EPS (TTM): 0.38
• Shares Outstanding: 27,510,689
• 10 Day Avg. Volume: 270,273
• 30 Day Avg. Volume: 316,275
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 6.24
• Enterprise Value/Ebitda: 21.52
• 1Y Price Target: $28.33
• Price Target Upside: 35.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 61 Neutral
• Price Target: $21.00 ▲(0.29% Upside)

The Hackett Group's overall stock score reflects strong revenue growth and strategic partnerships, countered by declining profit margins, bearish technical indicators, and high valuation concerns. The earnings call provided mixed signals, with growth in AI engagements offset by challenges in other segments.

Positive Factors

Acquisitions

The acquisition of LeewayHertz has significantly enhanced the company's generative AI consulting capabilities.

Investment Rating

The investment rating on HCKT stock is OUTPERFORM with a 12-month price target based on significant growth expectations.

Product Innovation

The company is introducing a new version of its XPLR platform, which designs generative AI solutions and workflows at unprecedented speed.

Negative Factors

Economic Headwinds

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

Revenue Decline

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

Sales Cycle

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 shows strong revenue growth but faces challenges with declining profit margins and free cash flow. Improved leverage is a positive, but reduced efficiency in equity returns is concerning.

Income Statement

The Hackett Group shows a strong revenue growth rate of 39.5% in the TTM, indicating robust expansion. However, margins have declined compared to previous years, with the net profit margin dropping to 5.37% from 9.44% in 2024. This suggests increased costs or competitive pressures impacting profitability.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.21 in the TTM, reflecting a healthier leverage position compared to previous years. However, the return on equity has decreased to 14.72%, indicating reduced efficiency in generating returns from equity.

Cash Flow

Free cash flow has decreased by 20.46% in the TTM, which is a concern for liquidity. The operating cash flow to net income ratio remains strong at 0.87, suggesting good cash generation relative to net income, but the decline in free cash flow growth is a potential risk.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	315.78M	313.86M	296.59M	293.74M	278.81M	239.48M
Gross Profit	117.32M	123.24M	116.38M	115.58M	105.66M	73.11M
EBITDA	34.02M	48.51M	52.68M	58.69M	50.85M	13.12M
Net Income	16.95M	29.63M	34.15M	40.80M	41.55M	5.47M
Balance Sheet
Total Assets	200.52M	191.88M	181.43M	184.99M	207.54M	192.54M
Cash, Cash Equivalents and Short-Term Investments	10.14M	16.37M	20.96M	30.25M	45.79M	49.45M
Total Debt	25.70M	15.68M	34.42M	61.11M	3.77M	6.12M
Total Liabilities	80.71M	76.30M	91.35M	126.72M	63.69M	51.66M
Stockholders Equity	119.80M	115.57M	90.08M	58.28M	143.85M	140.89M
Cash Flow
Free Cash Flow	35.36M	43.65M	33.30M	54.25M	43.11M	42.17M
Operating Cash Flow	41.06M	47.73M	37.40M	58.90M	46.35M	44.06M
Investing Cash Flow	-13.01M	-10.62M	-4.10M	-4.66M	-3.24M	-1.89M
Financing Cash Flow	-36.99M	-41.66M	-42.56M	-69.74M	-46.74M	-18.71M

The Hackett Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 20.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCKT, the sentiment is Neutral. The current price of 20.94 is above the 20-day moving average (MA) of 20.63, below the 50-day MA of 22.71, and below the 200-day MA of 26.92, indicating a neutral trend. The MACD of -0.54 indicates Negative momentum. The RSI at 43.14 is Neutral, neither overbought nor oversold. The STOCH value of 51.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HCKT.

The Hackett Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNXC	71 Outperform	$3.31B	14.27	5.59%	2.54%	11.31%	-16.02%
TASK	70 Outperform	$1.62B	26.67	12.49%	―	19.04%	24.49%
III	69 Neutral	$254.95M	33.12	8.29%	3.44%	-9.86%	―
Sector *	61 Neutral	$35.52B	8.84	-11.04%	1.87%	8.55%	-8.14%
HCKT	61 Neutral	$571.12M	34.02	15.27%	2.22%	4.18%	-51.62%
PSFE	61 Neutral	$803.37M	39.11	-5.88%	―	0.47%	-292.07%
SAIC	60 Neutral	$4.98B	13.80	25.40%	1.41%	2.23%	48.38%

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.