What is the market’s view of Heidrick & Struggles InternationN future operating performance as reflected in the current price of $29? Heidrick & Struggles InternationN common shares will need to reach $49 to achieve average annual stock market performance of 9.0% over the next 6 years. Upper quartile performance will require a $57 Heidrick & Struggles Internation stock price by 2028.
Executive Summary
- Key Heidrick & Struggles Internation characteristics: high expected growth, high financial strength, average profitability, and instability.
- Very low valuation, lagging shareholder returns. Current valuation levels are very low relative to the Heidrick & Struggles Internation Peer Group. Recent market returns have substantially underperformed the Heidrick & Struggles Internation Peer Group. Total shareholder returns expected to significantly beat the overall equity market. Based on current investor expectations, Heidrick & Struggles Internation shares should reach a level of $83 by 2028 — an 20.9% per year total shareholder return. A 2028 stock price of $49 would reflect median performance and a price of $57 would be required to reach upper quartile performance.
- Heidrick & Struggles Internation historical growth is modestly above average. Historical growth has been high relative to the Heidrick & Struggles Internation Peer Group and forecasted growth is relatively very high. Revenue Growth has been superior. EPS Growth has lagged. Heidrick & Struggles Internation historical income statement growth and balance sheet growth have diverged. Revenue growth has paralleled asset growth; earnings growth has fallen short of equity growth driving erosion in return on equity. Heidrick & Struggles Internation consensus growth expectations are lower than historical growth.
- Asset Turnover is group lagging. This factor has negatively affected market perceptions of Heidrick & Struggles Internation. The company has below average cash and will have to work to generate attractive investment opportunities and improve valuation.
- Heidrick & Struggles Internation risk profile is favorable. Overall variability has been very high with very high revenue variability, very high E.P.S. variability, and very low stock price volatility. Financial Strength is relatively high and earnings’ expectations are only average. The debt/capital ratio has declined very significantly.
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