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Heidrick & Struggles International (HSII)
NASDAQ:HSII
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Heidrick & Struggles (HSII) AI Stock Analysis

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HSII

Heidrick & Struggles

(NASDAQ:HSII)

Rating:74Outperform
Price Target:
$54.00
▲(7.21% Upside)
Heidrick & Struggles' stock score is primarily driven by its strong financial performance and positive technical indicators. The company's robust earnings call further supports its growth trajectory, despite some valuation concerns. The absence of notable corporate events keeps the focus on core financial and operational metrics.
Positive Factors
Addressable Market
Heidrick & Struggles serves an expansive addressable market of $42 billion, which is growing as large global businesses increasingly emphasize talent attraction, retention, and development.
Financial Performance
Q2/25 adjusted EBITDA margin expanded, resulting in adjusted EBITDA growing faster than revenue to $33.9 million, ahead of estimates.
Revenue Outlook
Heidrick provided guidance that calls for Q3/25 revenue in the range of $295-315 million, ahead of prior estimates and consensus.
Negative Factors
Client Hesitancy
The company has seen occasional hesitancy among clients due to the uncertain macroeconomic environment.
EBITDA Margin
Q4/24 adjusted EBITDA margin declined 460 basis points YOY to 9.5% due to increased variable compensation.

Heidrick & Struggles (HSII) vs. SPDR S&P 500 ETF (SPY)

Heidrick & Struggles Business Overview & Revenue Model

Company DescriptionHeidrick & Struggles International, Inc., together with its subsidiaries, provides executive search, consulting, and on-demand talent services to businesses and business leaders worldwide. The company enables its clients to build leadership teams by facilitating the recruitment, management, and development of senior executives. It also offers on-demand services to provide clients with independent talent, including professionals with industry and functional expertise for interim leadership roles and critical project-based initiatives; and consulting services, including leadership assessment and development, team and organization acceleration, digital acceleration and innovation, diversity and inclusion advisory services, and culture shaping services. The company provides its services to Fortune 1000 companies; Major U.S. and non-U.S. companies; middle market and emerging growth companies; private equity firms; governmental, higher education, and not-for-profit organizations; and other private and public entities. Heidrick & Struggles International, Inc. was founded in 1953 and is headquartered in Chicago, Illinois.
How the Company Makes MoneyHeidrick & Struggles generates revenue primarily through fees charged for its executive search and leadership consulting services. The company operates on a fee-for-service model, where clients pay for the successful placement of executives or for consulting engagements related to leadership development and organizational effectiveness. Key revenue streams include retained search fees, which are typically structured as a percentage of the placed executive's first-year compensation, and consulting fees for services that may involve assessments, coaching, or strategic advisory roles. Additionally, HSII benefits from long-term relationships with major corporations and partnerships with various organizations, which can lead to repeat business and referrals, thus bolstering its earnings.

Heidrick & Struggles Earnings Call Summary

Earnings Call Date:Aug 04, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, improved profitability, and a solid cash position, demonstrating the company's ability to perform well across various service lines. However, increased operating expenses, expected margin pressure, and potential project delays due to economic uncertainty were noted as concerns. Overall, the positive aspects slightly outweigh the challenges.
Q2-2025 Updates
Positive Updates
Record Revenue Growth
Second quarter revenue reached approximately $317 million, marking a 14% increase compared to Q2 2024.
Strong Performance Across Service Lines
All three reported solution lines saw growth, with Executive Search revenue growing 13%, On-Demand Talent revenue increasing 14%, and Heidrick Consulting revenue rising 17% year-over-year.
Improved Profitability
Adjusted EBITDA improved by $5 million to $34 million, with an adjusted EBITDA margin expansion of 40 basis points to 10.7%.
Strong Cash Position
The company ended the second quarter with a strong cash position of $400 million, up $103 million from the previous year.
Positive Executive Search Productivity
Consultant productivity in Executive Search annualized at $2.3 million, up from $2 million in the previous year.
Negative Updates
Increased Operating Expenses
Salary and benefits increased 17.6% from the prior year quarter due to higher base salaries, payroll taxes, and talent acquisition costs.
Margin Pressure Expected
Quarterly margins are expected to cycle down in the second half of the year due to progress on hiring plans.
Potential Project Delays
The current economic climate can heighten uncertainty, leading clients to potentially delay initiating new projects.
Company Guidance
During the Heidrick & Struggles Q2 2025 earnings call, CEO Tom Monahan and CFO Nirupam Sinha provided robust guidance, highlighting a 14% year-over-year revenue increase to $317 million and an adjusted EBITDA of $34 million with a margin of 10.7%. The company emphasized strong growth across all service lines: Executive Search revenue rose 13% to $238 million, On-Demand Talent climbed 14% to $48 million, and Heidrick Consulting increased 17% to $31 million. They reported high consultant productivity with an annualized $2.3 million in Executive Search and a notable cash position of $400 million. Looking ahead, they project Q3 revenue between $295 million and $315 million, anticipating a 10% growth at the midpoint compared to Q3 2024. The company remains focused on strategic priorities, including expanding their talent base and leveraging technology to enhance client solutions, while navigating macroeconomic uncertainties.

Heidrick & Struggles Financial Statement Overview

Summary
Heidrick & Struggles demonstrates solid financial health with consistent revenue growth and improved profitability. The balance sheet is strong with low leverage and improving return on equity. Cash flow generation is robust, though there is potential for better cash management. Overall, the company is on a positive trajectory with manageable risks.
Income Statement
75
Positive
Heidrick & Struggles has shown consistent revenue growth with a TTM growth rate of 3.44%. The gross profit margin is stable at 24.26%, and the net profit margin has improved to 2.92% from the previous year's 0.78%. However, the EBIT and EBITDA margins have slightly decreased, indicating potential cost management issues.
Balance Sheet
70
Positive
The company maintains a healthy debt-to-equity ratio of 0.21, indicating low leverage. Return on equity has improved to 7.23% in the TTM, reflecting better profitability. The equity ratio remains strong, suggesting financial stability. However, the overall asset growth is modest.
Cash Flow
68
Positive
Free cash flow has grown by 12.71% in the TTM, showing strong cash generation. The operating cash flow to net income ratio is 0.30, indicating efficient cash conversion. However, the free cash flow to net income ratio of 0.87 suggests room for improvement in cash flow management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.17B1.12B1.04B1.08B1.01B629.37M
Gross Profit284.57M281.10M261.80M275.48M232.81M157.50M
EBITDA101.59M92.80M101.11M122.87M125.59M76.47M
Net Income34.23M8.73M54.41M79.49M72.57M-37.71M
Balance Sheet
Total Assets1.14B1.19B1.14B1.18B1.11B787.81M
Cash, Cash Equivalents and Short-Term Investments399.53M563.52M478.16M621.62M545.23M336.47M
Total Debt105.14M100.81M99.70M82.85M84.96M115.80M
Total Liabilities648.55M741.37M679.31M764.99M770.78M520.21M
Stockholders Equity492.49M452.82M462.28M410.65M336.02M267.60M
Cash Flow
Free Cash Flow111.30M124.12M-40.23M108.15M265.16M16.03M
Operating Cash Flow127.72M150.43M-26.79M119.29M271.40M23.35M
Investing Cash Flow-99.81M-14.62M133.60M-279.60M-21.26M32.63M
Financing Cash Flow-17.18M-16.74M-53.53M-15.69M-15.52M-16.40M

Heidrick & Struggles Technical Analysis

Technical Analysis Sentiment
Positive
Last Price50.37
Price Trends
50DMA
47.03
Positive
100DMA
44.32
Positive
200DMA
44.17
Positive
Market Momentum
MACD
1.22
Negative
RSI
58.91
Neutral
STOCH
56.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSII, the sentiment is Positive. The current price of 50.37 is above the 20-day moving average (MA) of 48.72, above the 50-day MA of 47.03, and above the 200-day MA of 44.17, indicating a bullish trend. The MACD of 1.22 indicates Negative momentum. The RSI at 58.91 is Neutral, neither overbought nor oversold. The STOCH value of 56.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HSII.

Heidrick & Struggles Risk Analysis

Heidrick & Struggles disclosed 23 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
75
Outperform
$3.86B16.0013.49%2.32%-1.23%44.06%
74
Outperform
$1.05B31.777.18%1.19%8.89%-13.57%
64
Neutral
$3.80B21.2212.75%6.21%-6.95%-41.84%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
62
Neutral
$592.75M13.0629.14%4.98%-5.77%-11.93%
54
Neutral
$1.91B18.36-0.78%5.47%-3.79%-138.56%
54
Neutral
$451.28M225.24-2897.28%-16.20%-222.75%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HSII
Heidrick & Struggles
50.37
14.93
42.13%
KFRC
Kforce
32.13
-28.52
-47.02%
KFY
Korn Ferry
73.23
8.20
12.61%
MAN
ManpowerGroup
41.26
-25.48
-38.18%
RHI
Robert Half
37.03
-20.98
-36.17%
ZIP
ZipRecruiter
4.92
-4.19
-45.99%

Heidrick & Struggles Corporate Events

Executive/Board ChangesShareholder Meetings
Heidrick & Struggles Holds Annual Stockholders Meeting
Neutral
May 22, 2025

On May 22, 2025, Heidrick & Struggles International, Inc. held its annual stockholders meeting where 18,510,616 shares were represented. During the meeting, stockholders elected eight directors for a one-year term, approved executive officer compensation, and ratified the appointment of RSM US LLP as the independent registered public accounting firm for the 2025 fiscal year.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 22, 2025