U.S. Markets closed
  • S&P 500

    4,136.48
    -43.28 (-1.04%)
     
  • Dow 30

    33,926.01
    -127.93 (-0.38%)
     
  • Nasdaq

    12,006.96
    -193.86 (-1.59%)
     
  • Russell 2000

    1,985.53
    -15.69 (-0.78%)
     
  • Crude Oil

    73.23
    -2.65 (-3.49%)
     
  • Gold

    1,877.70
    -53.10 (-2.75%)
     
  • Silver

    22.40
    -1.22 (-5.17%)
     
  • EUR/USD

    1.0798
    -0.0113 (-1.0366%)
     
  • 10-Yr Bond

    3.5320
    +0.1360 (+4.00%)
     
  • Vix

    18.33
    -0.40 (-2.14%)
     
  • GBP/USD

    1.2056
    -0.0173 (-1.4106%)
     
  • USD/JPY

    131.1500
    +2.5460 (+1.9797%)
     
  • BTC-USD

    23,428.34
    -113.74 (-0.48%)
     
  • CMC Crypto 200

    535.42
    -1.43 (-0.27%)
     
  • FTSE 100

    7,901.80
    +81.64 (+1.04%)
     
  • Nikkei 225

    27,509.46
    +107.41 (+0.39%)
     

Is Heidrick & Struggles International, Inc. (NASDAQ:HSII) Potentially Undervalued?

Heidrick & Struggles International, Inc. (NASDAQ:HSII), is not the largest company out there, but it saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Heidrick & Struggles International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Heidrick & Struggles International

What's The Opportunity In Heidrick & Struggles International?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.12% above my intrinsic value, which means if you buy Heidrick & Struggles International today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $24.54, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Heidrick & Struggles International has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Heidrick & Struggles International?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 negative earnings growth of -3.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? HSII seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on HSII for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on HSII should the price fluctuate below its true value.

If you want to dive deeper into Heidrick & Struggles International, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Heidrick & Struggles International.

If you are no longer interested in Heidrick & Struggles International, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here