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On Wednesday, Benchmark analyst Bill Sutherland maintained a Buy rating on Huron Consulting Group (NASDAQ:HURN) with a steadfast $165.00 price target. This target aligns with the broader analyst consensus, as Huron’s stock has delivered an impressive 51.8% return over the past year. Sutherland’s endorsement follows Huron’s recent analyst presentation which outlined the company’s vision for the upcoming three years. The new strategic plan is seen as a continuation of the early 2022 three-year plan, which Huron surpassed in every aspect.Want deeper insights? InvestingPro offers 12 additional exclusive tips about Huron’s performance and valuation metrics.
Huron’s ambitious plan includes several key objectives: sustaining low double-digit revenue growth with high single-digit organic growth, consistent annual adjusted EBITDA margin expansion of 50-100 basis points, doubling adjusted EPS by 2029, and aiming for a 75% free cash flow conversion. The company’s current performance supports these goals, with a 9.11% revenue growth in the last twelve months and strong profitability metrics, including a 21% return on equity. The company plans to allocate its capital evenly between share repurchases and programmatic mergers and acquisitions.
Despite the current climate of regulatory and economic uncertainty, Huron is experiencing increased client demand and activity across most of its practices. The only noticeable challenges are related to the timing of certain digital projects. Huron’s competitive edge is attributed to its leadership in Healthcare and Education, a wide range of capabilities across different segments, a mix of pro-cyclical, neutral, and contra-cyclical offerings, high professional retention supported by significant equity incentives, and a combination of scale and agility.
Management has also reaffirmed its guidance for 2025, which suggests an adjusted EBITDA margin increase of 70 to 120 basis points. According to Sutherland, this guidance is likely conservative, and management has considerable control over how much of this expansion is allocated towards internal investments. Based on InvestingPro analysis, Huron currently trades near its Fair Value, with a strong financial health score of 3.2 out of 5, indicating solid fundamentals supporting its growth trajectory.
In other recent news, Huron Consulting Group announced strong fourth-quarter 2024 financial results, reporting an earnings per share (EPS) of $1.90, which exceeded analyst estimates of $1.52. The company also reported revenue of $399.31 million, surpassing the consensus estimate of $379.99 million. For the full year 2024, Huron achieved a 9.1% increase in revenues before reimbursable expenses, totaling a record $1.49 billion, and net income rose by 86.7% to $116.6 million. The company forecasts an EPS range of $6.80-$7.60 for 2025, with revenue projections between $1.58-1.66 billion, aligning closely with consensus estimates.
Additionally, Huron announced an increase in its share repurchase program to $700 million, a $200 million rise from the previous authorization, with the program extended until December 31, 2026. Analyst firms like Truist Securities have maintained a Buy rating on Huron’s stock, with price targets recently raised to $180, reflecting confidence in Huron’s growth prospects. Benchmark analyst Bill Sutherland also raised the price target to $165, citing the company’s strong performance and promising guidance for 2025. These developments indicate a positive outlook for Huron, with analysts noting potential growth opportunities in the healthcare and higher education sectors.
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