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Heidrick & Struggles International (HSII)
:HSII
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Heidrick & Struggles
(NASDAQ:HSII)
64Neutral
Positive Factors
Business Momentum
Heidrick Consulting segment revenue increased 11% YOY, with strong new project confirmations indicating sustained momentum.
Guidance
Q4/24 revenue guidance was set ahead of expectations, indicating a YOY increase of 0.7-8.6%.
Revenue Growth
Q4/24 revenue increased 9% YOY to $276.2 million, exceeding estimates and coming in above the high end of the guidance range.
Negative Factors
Cost Management
Increased variable compensation led to a decline in adjusted EBITDA margin, impacting profitability.
Profitability
Q4/24 adjusted EBITDA margin declined 460 basis points YOY to 9.5% due to increased variable compensation.
Heidrick & Struggles (HSII) vs. S&P 500 (SPY)
Market Cap
$838.44M
Dividend Yield1.53%
Average Volume (3M)135.07K
Price to Earnings (P/E)114.9
Beta (1Y)0.86
Revenue Growth6.17%
EPS Growth-85.16%
CountryUS
Employees2,210
SectorIndustrials
Sector Strength81
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.67
Shares Outstanding20,620,787
10 Day Avg. Volume134,232
30 Day Avg. Volume135,071
Financial Highlights & Ratios
PEG RatioN/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 Ratio0.00
Enterprise Value/Market Cap0.82
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.45
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$54.00Price Target Upside32.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Heidrick & Struggles Business Overview & Revenue Model
Company DescriptionHeidrick & Struggles International, Inc. is a global executive search and consulting firm specializing in leadership solutions. The company operates in various sectors, including healthcare, technology, financial services, and industrial markets. Its core services include executive search, leadership consulting, and culture shaping, helping organizations find and develop effective leaders and foster high-performing cultures.
How the Company Makes MoneyHeidrick & Struggles generates revenue primarily through fees for its executive search and leadership consulting services. The company charges clients a percentage of the total compensation for the executive placements it facilitates. Additionally, it earns income from consulting services aimed at improving organizational effectiveness and leadership capabilities. Significant partnerships with global corporations and organizations contribute to its revenue by expanding its client base and enhancing service offerings. Heidrick & Struggles' focus on high-level executive talent and strategic advisory services enables it to maintain a strong revenue stream in the competitive consulting industry.
Heidrick & Struggles Financial Statement Overview
Summary
Heidrick & Struggles displays solid financial health with strong cash flow recovery and a stable balance sheet. Revenue growth is positive at 7.1%, but profitability margins are under pressure with a low Net Profit Margin of 0.8%. The low leverage and improved cash flow provide a cushion for future growth opportunities.Income Statement
Heidrick & Struggles shows steady revenue growth with a 7.1% increase from 2023 to 2024, indicating a positive trend. Gross Profit Margin remains stable, showcasing operational efficiency. However, Net Profit Margin is low at 0.8%, affected by a drop in EBIT, suggesting pressure on profitability. The EBIT and EBITDA margins have declined significantly from previous years, indicating challenges in maintaining cost controls.75
Positive
Balance Sheet
The company maintains a strong equity position with an Equity Ratio of 37.9% for 2024, reflecting financial stability. The Debt-to-Equity Ratio is manageable at 0.22, suggesting low leverage risk. ROE is modest at 1.9%, indicating room for improvement in profit generation from equity.80
Positive
Cash Flow
Significant improvement in Free Cash Flow from 2023 to 2024, bouncing back from negative territory to a healthy positive level. Operating Cash Flow to Net Income ratio is robust, indicating efficient cash generation from operations. The company has successfully turned around its cash flow situation, enhancing liquidity.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.12B | 1.04B | 1.08B | 1.01B | 629.37M | Gross Profit |
| 281.10M | 276.11M | 275.48M | 238.28M | 178.95M | EBIT |
| 7.53M | 87.49M | 112.27M | 98.26M | 135.16M | EBITDA |
| 92.80M | 101.11M | 122.87M | 125.59M | 161.81M | Net Income Common Stockholders |
| 8.73M | 54.41M | 79.49M | 72.57M | -37.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 563.52M | 478.16M | 621.62M | 545.23M | 336.47M | Total Assets |
| 1.19B | 1.14B | 1.18B | 1.11B | 787.81M | Total Debt |
| 100.81M | 99.70M | 82.85M | 84.96M | 115.80M | Net Debt |
| -414.82M | -312.92M | -272.59M | -460.27M | -200.67M | Total Liabilities |
| 741.37M | 679.31M | 764.99M | 770.78M | 520.21M | Stockholders Equity |
| 452.82M | 462.28M | 410.65M | 336.02M | 267.60M |
| Cash Flow | Free Cash Flow | |||
| 124.12M | -40.23M | 108.15M | 265.16M | 16.03M | Operating Cash Flow |
| 150.43M | -26.79M | 119.29M | 271.40M | 23.35M | Investing Cash Flow |
| -14.62M | 133.60M | -279.60M | -21.26M | 32.63M | Financing Cash Flow |
| -16.74M | -53.53M | -15.69M | -15.52M | -16.40M |
Heidrick & Struggles Technical Analysis
Neutral
40.66
Price Trends
41.44
Negative
43.15
Negative
41.18
Negative
Market Momentum
-0.78
Negative
45.11
Neutral
76.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSII, the sentiment is Neutral. The current price of 40.66 is above the 20-day moving average (MA) of 39.18, below the 50-day MA of 41.44, and below the 200-day MA of 41.18, indicating a neutral trend. The MACD of -0.78 indicates Negative momentum. The RSI at 45.11 is Neutral, neither overbought nor oversold. The STOCH value of 76.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HSII.
Heidrick & Struggles Risk Analysis
Heidrick & Struggles disclosed 22 risk factors in its most recent earnings report. Heidrick & Struggles 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
Heidrick & Struggles Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $3.29B | 13.68 | 13.92% | 2.50% | -3.27% | 62.57% | |
65 Neutral | $696.39M | 14.89 | 31.45% | 4.07% | -6.38% | -12.32% | |
64 Neutral | $838.44M | 114.86 | 1.71% | 1.53% | 6.17% | -85.16% | |
64 Neutral | $4.25B | 11.72 | 5.24% | 249.79% | 4.07% | -9.45% | |
59 Neutral | $4.43B | 21.97 | 14.49% | 5.03% | -7.81% | -40.22% | |
57 Neutral | $1.80B | 17.68 | 5.19% | 7.55% | -5.52% | 133.51% | |
43 Neutral | $553.78M | 225.24 | -117.95% | ― | -26.59% | -126.85% |
* Industrials Sector Average
Performance Comparison
HSII
Heidrick & Struggles
40.66
9.34
29.82%
KFRC
Kforce
37.38
-25.04
-40.12%
KFY
Korn Ferry
63.79
1.18
1.88%
MAN
ManpowerGroup
38.85
-34.68
-47.16%
RHI
Robert Half
43.39
-24.43
-36.02%
ZIP
ZipRecruiter
5.37
-5.48
-50.51%
Heidrick & Struggles Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: 3.75%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Positive
The earnings call highlights strong revenue growth and improved profitability, with significant contributions from the Executive Search and On-Demand Talent segments. Despite increased operating expenses and challenges in Heidrick Consulting, the company maintains a strong cash position and is optimistic about navigating the evolving landscape. However, there is some uncertainty due to potential client decision-making delays amid economic conditions.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
First quarter revenue reached approximately $284 million, marking a 7% increase compared to Q1 2024.
Improved Profitability
Adjusted EBITDA improved by $3.3 million to $29.1 million, with an adjusted EBITDA margin expansion of 50 basis points to 10.3%.
Executive Search Performance
Executive Search revenue grew 6% to $213 million, with regional revenue increases of 6% in the Americas, 9% in Europe, and 1% in APAC.
On-Demand Talent Growth
Revenue increased by 12% to $43 million, marking continued outperformance with increases in volume in both wins and project extensions.
Strong Cash Position
Ended the first quarter with a strong cash position of $325 million, up $72 million from $253 million at the end of March 2024.
Negative Updates
Increased Operating Expenses
Salary and benefits increased 8.6% from the prior year quarter, with fixed compensation rising due to higher separation, base salaries, and payroll taxes.
Challenges in Heidrick Consulting
Heidrick Consulting saw an adjusted EBITDA loss of $2.1 million for the quarter, although there is a focus on simplifying operations and increasing profitability.
Client Decision-Making Uncertainty
Acknowledged that the current economic climate can heighten uncertainty, leading clients to delay initiating projects or temporarily pause ongoing ones.
Company Guidance
During Heidrick & Struggles' 2025 First Quarter Conference Call, CEO Tom Monahan and CFO Nirupam Sinha discussed the company's robust performance, with first-quarter revenue reaching approximately $284 million, a 7% increase from Q1 2024. Adjusted EBITDA improved by $3.3 million to $29.1 million, with a 10.3% adjusted EBITDA margin. The company's strategies focus on creating client value, notably through leadership talent, and adapting to economic challenges. Monahan highlighted the company's resilience, with organic revenue growth targets of mid- to high single digits and organic adjusted EBITDA growth of 5%-8% annually. Sinha provided further details, noting an increase of 6% in Executive Search revenue, with profitability improving to an adjusted EBITDA margin of 24.5%. On-Demand Talent saw a 12% revenue increase, marking a shift to profitability, while Heidrick Consulting's revenue grew by 7%, focusing on leadership assessment. The company ended Q1 with a strong cash position of $325 million, supporting strategic plans and potential capital returns. Guidance for Q2 revenue was set between $285 million and $305 million, reflecting confidence in navigating economic uncertainty and sustaining long-term shareholder value.Heidrick & Struggles Corporate Events
Executive/Board Changes
Heidrick & Struggles Announces Leadership Transition Plans
Neutral
Jan 30, 2025
On January 27, 2025, Heidrick & Struggles International, Inc. announced that Sarah Payne will transition from her role as Chief Human Resources Officer to an advisory position, effective March 31, 2025. The company will begin an executive search for her successor and expects to finalize an agreement detailing any payments or benefits related to her transition and eventual departure by June 30, 2025.
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.