HACKETT GROUP INC/THE (HCKT) Stock Fundamental Analysis
NASDAQ:HCKT - Nasdaq - US4046091090 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to HCKT. HCKT was compared to 81 industry peers in the IT Services industry. HCKT has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. HCKT has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
HCKT had positive earnings in the past year.
In the past year HCKT had a positive cash flow from operations.
In the past 5 years HCKT has always been profitable.
HCKT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HCKT has a Return On Assets of 15.44%. This is amongst the best in the industry. HCKT outperforms 96.30% of its industry peers.
The Return On Equity of HCKT (25.64%) is better than 88.89% of its industry peers.
With an excellent Return On Invested Capital value of 23.05%, HCKT belongs to the best of the industry, outperforming 97.53% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HCKT is significantly above the industry average of 10.72%.
The 3 year average ROIC (27.20%) for HCKT is well above the current ROIC(23.05%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.44% | ||
| ROE | 25.64% | ||
| ROIC | 23.05% |
ROA(3y)18.77%
ROA(5y)15.84%
ROE(3y)44.51%
ROE(5y)33.26%
ROIC(3y)27.2%
ROIC(5y)22.5%
1.3 Margins
HCKT has a better Profit Margin (9.44%) than 72.84% of its industry peers.
In the last couple of years the Profit Margin of HCKT has grown nicely.
Looking at the Operating Margin, with a value of 14.24%, HCKT belongs to the top of the industry, outperforming 80.25% of the companies in the same industry.
HCKT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 39.27%, HCKT is in line with its industry, outperforming 59.26% of the companies in the same industry.
HCKT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.24% | ||
| PM (TTM) | 9.44% | ||
| GM | 39.27% |
OM growth 3Y-5.13%
OM growth 5Y3.06%
PM growth 3Y-14.08%
PM growth 5Y2.74%
GM growth 3Y1.18%
GM growth 5Y2.78%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HCKT is creating value.
HCKT has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, HCKT has less shares outstanding
The debt/assets ratio for HCKT has been reduced compared to a year ago.
2.2 Solvency
HCKT has an Altman-Z score of 8.74. This indicates that HCKT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HCKT (8.74) is better than 87.65% of its industry peers.
The Debt to FCF ratio of HCKT is 0.29, which is an excellent value as it means it would take HCKT, only 0.29 years of fcf income to pay off all of its debts.
HCKT's Debt to FCF ratio of 0.29 is amongst the best of the industry. HCKT outperforms 88.89% of its industry peers.
HCKT has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.11, HCKT is in the better half of the industry, outperforming 70.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.29 | ||
| Altman-Z | 8.74 |
ROIC/WACC2.45
WACC9.42%
2.3 Liquidity
A Current Ratio of 1.44 indicates that HCKT should not have too much problems paying its short term obligations.
HCKT's Current ratio of 1.44 is in line compared to the rest of the industry. HCKT outperforms 43.21% of its industry peers.
A Quick Ratio of 1.44 indicates that HCKT should not have too much problems paying its short term obligations.
The Quick ratio of HCKT (1.44) is comparable to the rest of the industry.
The current and quick ratio evaluation for HCKT is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.44 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
HCKT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.69%.
HCKT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.71% yearly.
Looking at the last year, HCKT shows a small growth in Revenue. The Revenue has grown by 5.82% in the last year.
The Revenue has been growing slightly by 2.13% on average over the past years.
EPS 1Y (TTM)7.69%
EPS 3Y8.65%
EPS 5Y10.71%
EPS Q2Q%20.51%
Revenue 1Y (TTM)5.82%
Revenue growth 3Y4.03%
Revenue growth 5Y2.13%
Sales Q2Q%9.98%
3.2 Future
Based on estimates for the next years, HCKT will show a small growth in Earnings Per Share. The EPS will grow by 7.40% on average per year.
The Revenue is expected to grow by 4.49% on average over the next years.
EPS Next Y6.45%
EPS Next 2Y7.4%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.45%
Revenue Next 2Y4.49%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 15.39, the valuation of HCKT can be described as correct.
Based on the Price/Earnings ratio, HCKT is valued a bit cheaper than the industry average as 74.07% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.29. HCKT is valued slightly cheaper when compared to this.
HCKT is valuated correctly with a Price/Forward Earnings ratio of 14.46.
75.31% of the companies in the same industry are more expensive than HCKT, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of HCKT to the average of the S&P500 Index (21.08), we can say HCKT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.39 | ||
| Fwd PE | 14.46 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HCKT is valued a bit cheaper than 64.20% of the companies in the same industry.
79.01% of the companies in the same industry are more expensive than HCKT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.38 | ||
| EV/EBITDA | 14.64 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HCKT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.39
PEG (5Y)1.44
EPS Next 2Y7.4%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.86%, HCKT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.23, HCKT pays a better dividend. On top of this HCKT pays more dividend than 87.65% of the companies listed in the same industry.
HCKT's Dividend Yield is slightly below the S&P500 average, which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
5.2 History
The dividend of HCKT is nicely growing with an annual growth rate of 7.93%!
HCKT has been paying a dividend for at least 10 years, so it has a reliable track record.
HCKT has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)7.93%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
40.88% of the earnings are spent on dividend by HCKT. This is a bit on the high side, but may be sustainable.
HCKT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP40.88%
EPS Next 2Y7.4%
EPS Next 3YN/A
25.86
-0.17 (-0.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners83.22%
Inst Owner Change-0.13%
Ins Owners10.36%
Ins Owner Change2.4%
Market Cap715.03M
Analysts84.44
Price Target36.38 (40.68%)
Short Float %1.3%
Short Ratio2.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
Yearly Dividend0.44
Dividend Growth(5Y)7.93%
DP40.88%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.88%
Min EPS beat(2)6.28%
Max EPS beat(2)11.48%
EPS beat(4)4
Avg EPS beat(4)5.65%
Min EPS beat(4)2.42%
Max EPS beat(4)11.48%
EPS beat(8)7
Avg EPS beat(8)3.8%
EPS beat(12)11
Avg EPS beat(12)5.94%
EPS beat(16)15
Avg EPS beat(16)8.38%
Revenue beat(2)2
Avg Revenue beat(2)2.36%
Min Revenue beat(2)2.1%
Max Revenue beat(2)2.63%
Revenue beat(4)4
Avg Revenue beat(4)1.71%
Min Revenue beat(4)0.57%
Max Revenue beat(4)2.63%
Revenue beat(8)6
Avg Revenue beat(8)0.81%
Revenue beat(12)9
Avg Revenue beat(12)0.98%
Revenue beat(16)13
Avg Revenue beat(16)1.98%
PT rev (1m)0%
PT rev (3m)18.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.23%
EPS NY rev (1m)0.57%
EPS NY rev (3m)0.96%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.73%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.39 | ||
| Fwd PE | 14.46 | ||
| P/S | 2.28 | ||
| P/FCF | 16.38 | ||
| P/OCF | 14.98 | ||
| P/B | 6.19 | ||
| P/tB | 30.45 | ||
| EV/EBITDA | 14.64 |
EPS(TTM)1.68
EY6.5%
EPS(NY)1.79
Fwd EY6.92%
FCF(TTM)1.58
FCFY6.1%
OCF(TTM)1.73
OCFY6.68%
SpS11.35
BVpS4.18
TBVpS0.85
PEG (NY)2.39
PEG (5Y)1.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.44% | ||
| ROE | 25.64% | ||
| ROCE | 32.21% | ||
| ROIC | 23.05% | ||
| ROICexc | 26.13% | ||
| ROICexgc | 105.58% | ||
| OM | 14.24% | ||
| PM (TTM) | 9.44% | ||
| GM | 39.27% | ||
| FCFM | 13.91% |
ROA(3y)18.77%
ROA(5y)15.84%
ROE(3y)44.51%
ROE(5y)33.26%
ROIC(3y)27.2%
ROIC(5y)22.5%
ROICexc(3y)33.26%
ROICexc(5y)28.91%
ROICexgc(3y)192.93%
ROICexgc(5y)166.38%
ROCE(3y)38.01%
ROCE(5y)31.45%
ROICexcg growth 3Y-11.97%
ROICexcg growth 5Y9.73%
ROICexc growth 3Y-5.69%
ROICexc growth 5Y5.53%
OM growth 3Y-5.13%
OM growth 5Y3.06%
PM growth 3Y-14.08%
PM growth 5Y2.74%
GM growth 3Y1.18%
GM growth 5Y2.78%
F-Score7
Asset Turnover1.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.29 | ||
| Debt/EBITDA | 0.26 | ||
| Cap/Depr | 104.11% | ||
| Cap/Sales | 1.3% | ||
| Interest Coverage | 23.51 | ||
| Cash Conversion | 98.19% | ||
| Profit Quality | 147.32% | ||
| Current Ratio | 1.44 | ||
| Quick Ratio | 1.44 | ||
| Altman-Z | 8.74 |
F-Score7
WACC9.42%
ROIC/WACC2.45
Cap/Depr(3y)119.95%
Cap/Depr(5y)95.2%
Cap/Sales(3y)1.42%
Cap/Sales(5y)1.24%
Profit Quality(3y)125.92%
Profit Quality(5y)249.68%
High Growth Momentum
Growth
EPS 1Y (TTM)7.69%
EPS 3Y8.65%
EPS 5Y10.71%
EPS Q2Q%20.51%
EPS Next Y6.45%
EPS Next 2Y7.4%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.82%
Revenue growth 3Y4.03%
Revenue growth 5Y2.13%
Sales Q2Q%9.98%
Revenue Next Year4.45%
Revenue Next 2Y4.49%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-11.39%
EBIT growth 3Y-1.31%
EBIT growth 5Y5.25%
EBIT Next Year40.08%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y31.08%
FCF growth 3Y0.42%
FCF growth 5Y2.93%
OCF growth 1Y27.61%
OCF growth 3Y0.98%
OCF growth 5Y2.42%