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Wednesday - Benchmark analysts have increased the price target on Huron Consulting Group (NASDAQ:HURN) to $165 from $140, while maintaining a Buy rating on the stock. According to InvestingPro data, the company currently trades near its Fair Value, with three analysts recently revising their earnings estimates upward. The decision follows Huron’s robust fourth-quarter earnings and the release of its 2025 guidance.
The company reported a significant acceleration in revenue and adjusted EBITDA growth, with figures reaching 14.5% and 37.1%, respectively. With a robust financial health score rated as "GOOD" by InvestingPro, Huron’s initial guidance for 2025 suggests conservative estimates, with projected midpoint revenue and adjusted EBITDA growth of 9% (7.6% organic) and 17%, both surpassing consensus expectations.
Analysts at Benchmark emphasized the favorable macroeconomic environment, especially in the healthcare sector, which could benefit from potential changes in clinical reimbursement models, adjustments to NIH funding for research, stricter Medicaid eligibility, and tax exemption status modifications for certain organizations.
Huron’s guidance also indicated an adjusted EBITDA margin expansion of 70 to 120 basis points. This improvement is expected to be driven by several factors, including pricing initiatives, stringent expense management, efficiencies derived from artificial intelligence, the use of a global delivery platform, and consultant compensation incentives linked to margin targets.
The company’s free cash flow saw a substantial increase in 2024, rising to $168 million from $100 million. This financial strength enabled Huron to pay down debt, repurchase 1.2 million shares, and invest in Axia Consulting. The 2025 adjusted EBITDA target of 14%-14.5% aligns with the mid-teens margin range set during Huron’s Investor Day in early 2022, when its trailing twelve months adjusted EBITDA margin was at 10.5%.
Looking ahead, Huron management has scheduled another Investor Day for March 25th, where further insights into the company’s strategic plan and financial targets for the coming years are expected to be shared. The company has been actively buying back shares while maintaining moderate debt levels, demonstrating strong financial management. For deeper insights into Huron’s financial health and growth prospects, including 7 additional ProTips and comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Huron Consulting Group Inc. reported a strong fourth quarter for 2024, surpassing analyst expectations with an earnings per share (EPS) of $1.90, compared to the forecasted $1.52. The company’s revenue also exceeded projections, reaching $399.31 million against the anticipated $379.99 million. For the full year 2024, Huron achieved record annual revenues of $1.49 billion, marking a 9.1% increase from the previous year. Looking ahead, the company has issued guidance for 2025, projecting revenues between $1.58 billion and $1.66 billion, with an expected growth rate of 9% at the midpoint. Additionally, Huron anticipates an adjusted EBITDA margin between 14% and 14.5%, and an adjusted EPS ranging from $6.80 to $7.60.
In terms of strategic moves, Huron recently completed the acquisition of Axia Consulting, which is expected to contribute significantly to the company’s commercial segment growth in 2025. The acquisition aligns with Huron’s focus on expanding its digital capabilities and supply chain management offerings. The company also divested its Studer Education business, which primarily served the K-12 education market, to better align its resources with areas of strategic focus. Despite challenges in the healthcare and education sectors, Huron’s diversified portfolio and strategic acquisitions have supported its robust performance, with strong demand across its healthcare, education, and commercial segments.
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