Analysts Are Updating Their Heidrick & Struggles International, Inc. (NASDAQ:HSII) Estimates After Its Full-Year Results
It's been a pretty great week for Heidrick & Struggles International, Inc. (NASDAQ:HSII) shareholders, with its shares surging 15% to US$33.80 in the week since its latest full-year results. It was a credible result overall, with revenues of US$1.0b and statutory earnings per share of US$2.62 both in line with analyst estimates, showing that Heidrick & Struggles International is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Heidrick & Struggles International after the latest results.
Check out our latest analysis for Heidrick & Struggles International
Following the latest results, Heidrick & Struggles International's three analysts are now forecasting revenues of US$1.05b in 2024. This would be a satisfactory 2.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 12% to US$3.02. In the lead-up to this report, the analysts had been modelling revenues of US$1.05b and earnings per share (EPS) of US$3.10 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$35.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Heidrick & Struggles International at US$40.00 per share, while the most bearish prices it at US$30.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Heidrick & Struggles International's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Heidrick & Struggles International.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Heidrick & Struggles International. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Heidrick & Struggles International going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Heidrick & Struggles International , and understanding them should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
