The Hackett Group, Inc. (NASDAQ: HCKT), which had a so-so session until mid-day on Thursday, spiked sharply following an upgrade by Roth Capital Partners.
The upgrade came after the release of third-quarter results by the IP-based strategic consultancy and enterprise benchmarking and best practices implementation firm.
Roth Capital Partners' Jeff Martin.
Upgraded shares from Neutral to Buy and raised its price target from $16 to $20.
The upgrade is premised on the view that Hackett can return to favorable comparisons in the first quarter of 2018, Martin said in a note. The analyst expects the 2018 operating leverage to exceed historical levels, given a more favorable mix, with contributions from Cloud and IP-as-a-Service.
Reviewing the results, Martin said Hackett's third-quarter net revenues, which fell 1 percent, was at the high-end of the management guidance and exceeded his expectations. Pro forma earnings per share also came in at the high-end of the guidance.
Roth Capital expects year-over-year comparisons to strengthen throughout 2019, as the rate and smaller size of decline in the on-premise is offset by rapid growth and the expanding size of the Cloud business.
"We expect an 4Q18 growth rate improving to 6.4% y/y, where we believe operating leverage will be apparent," the firm said.
Roth sees upside risk to its estimates if a seven-figure deal in Cloud materializes. This, according to the firm, could push the stock past its $20 price target.
The Price Action
At time of writing, shares of Hackett were up 2.44 percent at $15.22.
Latest Ratings for HCKT
|Nov 2017||Roth Capital||Upgrades||Neutral||Buy|
|Jun 2017||SunTrust Robinson Humphrey||Initiates Coverage On||Buy|
View More Analyst Ratings for HCKT
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