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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:70Neutral
Price Target:
$50.00
▲(8.15%Upside)
Heidrick & Struggles' solid financial performance and strong technical indicators underpin its stock score. The earnings call was positive, highlighting growth and improved profitability. However, the high P/E ratio suggests overvaluation, which tempers the overall score. The company's strong cash position and strategic focus provide further confidence.
Positive Factors
Market Opportunity
Heidrick & Struggles serves an expansive addressable market of $42 billion, which is growing as large global businesses increasingly emphasize talent attraction, retention, and development.
Resilient Demand
Resilient demand for Heidrick’s solutions highlights the critical importance of leadership in driving corporate performance amidst a complex operating environment.
Revenue Performance
Q4/24 revenue increased 9% YOY to $276.2 million, which exceeded the estimate and consensus while coming in above the high end of the guidance range.
Negative Factors
Profit Margin Pressure
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. is a global executive search and consulting firm headquartered in Chicago, Illinois. The company operates in the human capital and organizational consulting sectors, providing leadership consulting, culture shaping, and senior-level executive search services. With a presence in major financial centers around the world, Heidrick & Struggles helps organizations build effective leadership teams to drive business success.
How the Company Makes MoneyHeidrick & Struggles generates revenue primarily through its executive search and consulting services. The company earns fees for placing senior executives and other top-level positions within client organizations. Additionally, it provides leadership consulting services, which include succession planning, leadership development, and culture shaping, contributing to its revenue streams. The firm's global reach and diverse industry expertise enable it to maintain long-term partnerships with multinational corporations, which significantly contribute to its earnings.

Heidrick & Struggles Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 18.39%|
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 Financial Statement Overview

Summary
Heidrick & Struggles demonstrates moderate financial health with consistent revenue growth and a strong cash position. Profitability margins are low, and operational efficiency needs improvement. The balance sheet is solid with low leverage, but there is room for enhancing returns on equity.
Income Statement
65
Positive
The company has shown a steady increase in total revenue over the years, with a recent TTM (Trailing-Twelve-Months) revenue of $1,134,020,000. Gross profit margin is moderate at 24.5%, indicating decent cost management. However, net profit margin is quite low at 0.7%, reflecting challenges in maintaining profitability. EBIT and EBITDA margins are also on the lower side at 2.7% and 7.7%, respectively, suggesting limited operational efficiency.
Balance Sheet
72
Positive
Heidrick & Struggles maintains a solid equity base with a stockholders' equity of $465,050,000 and a favorable equity ratio of 45.4%. The debt-to-equity ratio is low at 0.22, indicating prudent leverage management. Return on equity (ROE) has decreased significantly, currently at 1.7%, pointing to potential inefficiencies in generating returns from equity.
Cash Flow
70
Positive
The company exhibits strong free cash flow generation with a recent TTM free cash flow of $98,755,000. However, free cash flow has declined from the prior year, indicating potential operational challenges. The operating cash flow to net income ratio is robust at 15.2, suggesting efficient cash conversion from profits.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.12B1.04B1.08B1.01B629.37M
Gross Profit281.10M276.11M275.48M238.28M178.95M
EBITDA92.80M101.11M122.87M125.59M161.81M
Net Income8.73M54.41M79.49M72.57M-37.71M
Balance Sheet
Total Assets1.19B1.14B1.18B1.11B787.81M
Cash, Cash Equivalents and Short-Term Investments563.52M478.16M621.62M545.23M336.47M
Total Debt100.81M99.70M82.85M84.96M115.80M
Total Liabilities741.37M679.31M764.99M770.78M520.21M
Stockholders Equity452.82M462.28M410.65M336.02M267.60M
Cash Flow
Free Cash Flow124.12M-40.23M108.15M265.16M16.03M
Operating Cash Flow150.43M-26.79M119.29M271.40M23.35M
Investing Cash Flow-14.62M133.60M-279.60M-21.26M32.63M
Financing Cash Flow-16.74M-53.53M-15.69M-15.52M-16.40M

Heidrick & Struggles Technical Analysis

Technical Analysis Sentiment
Positive
Last Price46.23
Price Trends
50DMA
44.75
Positive
100DMA
43.08
Positive
200DMA
43.17
Positive
Market Momentum
MACD
0.51
Positive
RSI
52.75
Neutral
STOCH
38.10
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 46.23 is below the 20-day moving average (MA) of 46.66, above the 50-day MA of 44.75, and above the 200-day MA of 43.17, indicating a neutral trend. The MACD of 0.51 indicates Positive momentum. The RSI at 52.75 is Neutral, neither overbought nor oversold. The STOCH value of 38.10 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 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$3.82B16.1013.49%2.31%-1.23%44.06%
71
Outperform
$838.72M17.8231.45%3.42%-6.38%-12.32%
70
Neutral
$966.50M137.371.71%1.30%6.17%-85.16%
65
Neutral
$11.06B15.735.16%1.93%3.12%-25.59%
61
Neutral
$4.07B24.2212.75%5.62%-6.95%-41.84%
59
Neutral
$2.07B18.36-0.78%5.05%-3.79%-138.56%
44
Neutral
$426.43M225.24-2897.28%-20.95%-152.29%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HSII
Heidrick & Struggles
46.23
10.69
30.08%
KFRC
Kforce
46.36
-20.05
-30.19%
KFY
Korn Ferry
73.54
3.72
5.33%
MAN
ManpowerGroup
44.76
-27.01
-37.63%
RHI
Robert Half
39.84
-20.12
-33.56%
ZIP
ZipRecruiter
4.59
-4.54
-49.73%

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.

The most recent analyst rating on (HSII) stock is a Hold with a $53.00 price target. To see the full list of analyst forecasts on Heidrick & Struggles stock, see the HSII Stock Forecast page.

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: Jul 01, 2025