When Should You Buy Heidrick & Struggles International, Inc. (NASDAQ:HSII)?
Heidrick & Struggles International, Inc. (NASDAQ:HSII), which is in the professional services business, and is based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Heidrick & Struggles International’s outlook and valuation to see if the opportunity still exists.
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What is Heidrick & Struggles International worth?
Great news for investors – Heidrick & Struggles International is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $55.15, but it is currently trading at US$33.25 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Heidrick & Struggles International’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Heidrick & Struggles International look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Heidrick & Struggles International, it is expected to deliver a relatively unexciting top-line growth of 8.4% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since HSII is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on HSII for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HSII. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Heidrick & Struggles International. You can find everything you need to know about Heidrick & Struggles International in the latest infographic research report. If you are no longer interested in Heidrick & Struggles International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
