Is There Now An Opportunity In The Hackett Group, Inc. (NASDAQ:HCKT)?
While The Hackett Group, Inc. (NASDAQ:HCKT) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. As a small cap stock, hardly covered by any analysts, 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? Today I will analyse the most recent data on Hackett Group’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Hackett Group
What Is Hackett Group Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19% below my intrinsic value, which means if you buy Hackett Group today, you’d be paying a fair price for it. And if you believe the company’s true value is $26.57, then there’s not much of an upside to gain from mispricing. What's more, Hackett Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Hackett Group look like?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -12% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Hackett Group. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? HCKT seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal 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 HCKT for a while, now may not be the most advantageous 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. In addition to this, 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 HCKT should the price fluctuate below its true value.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Our analysis shows 2 warning signs for Hackett Group (1 shouldn't be ignored!) and we strongly recommend you look at these before investing.
If you are no longer interested in Hackett Group, 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.
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