HEIDRICK & STRUGGLES INTL (HSII) Stock Fundamental Analysis
NASDAQ:HSII - Nasdaq - US4228191023 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to HSII. HSII was compared to 82 industry peers in the Professional Services industry. Both the profitability and the financial health of HSII get a neutral evaluation. Nothing too spectacular is happening here. HSII is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
HSII had positive earnings in the past year.
In the past year HSII had a positive cash flow from operations.
HSII had positive earnings in 4 of the past 5 years.
Of the past 5 years HSII 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of HSII (3.37%) is comparable to the rest of the industry.
HSII has a Return On Equity (7.98%) which is in line with its industry peers.
Looking at the Return On Invested Capital, with a value of 6.62%, HSII is in line with its industry, outperforming 49.37% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HSII is below the industry average of 13.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 7.98% | ||
| ROIC | 6.62% |
ROA(3y)6.03%
ROA(5y)3.77%
ROE(3y)17.58%
ROE(5y)10.76%
ROIC(3y)10.58%
ROIC(5y)9.5%
1.3 Margins
Looking at the Profit Margin, with a value of 3.53%, HSII is in line with its industry, outperforming 50.63% of the companies in the same industry.
HSII's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 6.98%, HSII perfoms like the industry average, outperforming 56.96% of the companies in the same industry.
HSII's Operating Margin has declined in the last couple of years.
HSII has a better Gross Margin (87.64%) than 94.94% of its industry peers.
HSII's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.98% | ||
| PM (TTM) | 3.53% | ||
| GM | 87.64% |
OM growth 3Y0.09%
OM growth 5Y-3.26%
PM growth 3YN/A
PM growth 5Y-4.85%
GM growth 3Y-3.72%
GM growth 5Y-1.96%
2. Health
2.1 Basic Checks
HSII has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
HSII has more shares outstanding than it did 1 year ago.
HSII has more shares outstanding than it did 5 years ago.
HSII has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
HSII has an Altman-Z score of 2.53. This is not the best score and indicates that HSII is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.53, HSII is in line with its industry, outperforming 41.77% of the companies in the same industry.
There is no outstanding debt for HSII. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 2.53 |
ROIC/WACC0.73
WACC9.06%
2.3 Liquidity
A Current Ratio of 1.73 indicates that HSII should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.73, HSII is in the better half of the industry, outperforming 68.35% of the companies in the same industry.
A Quick Ratio of 1.73 indicates that HSII should not have too much problems paying its short term obligations.
HSII's Quick ratio of 1.73 is fine compared to the rest of the industry. HSII outperforms 68.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.73 |
3. Growth
3.1 Past
HSII shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.33%.
HSII shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.89% yearly.
HSII shows a small growth in Revenue. In the last year, the Revenue has grown by 6.81%.
HSII shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.19% yearly.
EPS 1Y (TTM)-7.33%
EPS 3Y17.99%
EPS 5Y2.89%
EPS Q2Q%-1.37%
Revenue 1Y (TTM)6.81%
Revenue growth 3Y18.27%
Revenue growth 5Y7.19%
Sales Q2Q%7.47%
3.2 Future
HSII is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.61% yearly.
Based on estimates for the next years, HSII will show a small growth in Revenue. The Revenue will grow by 4.32% on average per year.
EPS Next Y-6.9%
EPS Next 2Y0.25%
EPS Next 3Y5.61%
EPS Next 5YN/A
Revenue Next Year6.33%
Revenue Next 2Y4.69%
Revenue Next 3Y4.32%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.90, the valuation of HSII can be described as correct.
68.35% of the companies in the same industry are more expensive than HSII, based on the Price/Earnings ratio.
HSII's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.63.
A Price/Forward Earnings ratio of 14.02 indicates a correct valuation of HSII.
Based on the Price/Forward Earnings ratio, HSII is valued a bit cheaper than 68.35% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HSII to the average of the S&P500 Index (22.68), we can say HSII is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.9 | ||
| Fwd PE | 14.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HSII is valued cheaply inside the industry as 93.67% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, HSII is valued cheaply inside the industry as 96.20% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.4 | ||
| EV/EBITDA | 4.28 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)5.16
EPS Next 2Y0.25%
EPS Next 3Y5.61%
5. Dividend
5.1 Amount
HSII has a Yearly Dividend Yield of 1.42%. Purely for dividend investing, there may be better candidates out there.
HSII's Dividend Yield is a higher than the industry average which is at 1.92.
HSII's Dividend Yield is slightly below the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.42% |
5.2 History
The dividend of HSII has a limited annual growth rate of 3.03%.
HSII has paid a dividend for at least 10 years, which is a reliable track record.
HSII has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.03%
Div Incr Years0
Div Non Decr Years11
5.3 Sustainability
33.06% of the earnings are spent on dividend by HSII. This is a low number and sustainable payout ratio.
The dividend of HSII is growing, but earnings are growing more, so the dividend growth is sustainable.
DP33.06%
EPS Next 2Y0.25%
EPS Next 3Y5.61%
41.41
-0.82 (-1.94%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners96.42%
Inst Owner Change1.43%
Ins Owners1.11%
Ins Owner Change1.48%
Market Cap845.18M
Analysts82.5
Price Target49.3 (19.05%)
Short Float %2.05%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.42% |
Yearly Dividend0.63
Dividend Growth(5Y)3.03%
DP33.06%
Div Incr Years0
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.46%
Min EPS beat(2)4.32%
Max EPS beat(2)16.6%
EPS beat(4)4
Avg EPS beat(4)9.16%
Min EPS beat(4)1.81%
Max EPS beat(4)16.6%
EPS beat(8)7
Avg EPS beat(8)9.73%
EPS beat(12)10
Avg EPS beat(12)11.02%
EPS beat(16)14
Avg EPS beat(16)21.58%
Revenue beat(2)2
Avg Revenue beat(2)3.2%
Min Revenue beat(2)2.81%
Max Revenue beat(2)3.6%
Revenue beat(4)4
Avg Revenue beat(4)2.42%
Min Revenue beat(4)0.03%
Max Revenue beat(4)3.6%
Revenue beat(8)7
Avg Revenue beat(8)2.02%
Revenue beat(12)9
Avg Revenue beat(12)1.96%
Revenue beat(16)13
Avg Revenue beat(16)4.31%
PT rev (1m)0%
PT rev (3m)21.85%
EPS NQ rev (1m)-2.08%
EPS NQ rev (3m)-0.53%
EPS NY rev (1m)0%
EPS NY rev (3m)0.37%
Revenue NQ rev (1m)0.22%
Revenue NQ rev (3m)0.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.9 | ||
| Fwd PE | 14.02 | ||
| P/S | 0.77 | ||
| P/FCF | 8.4 | ||
| P/OCF | 7.41 | ||
| P/B | 1.75 | ||
| P/tB | 2.99 | ||
| EV/EBITDA | 4.28 |
EPS(TTM)2.78
EY6.71%
EPS(NY)2.95
Fwd EY7.13%
FCF(TTM)4.93
FCFY11.9%
OCF(TTM)5.59
OCFY13.49%
SpS53.51
BVpS23.68
TBVpS13.85
PEG (NY)N/A
PEG (5Y)5.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 7.98% | ||
| ROCE | 10.15% | ||
| ROIC | 6.62% | ||
| ROICexc | 14.56% | ||
| ROICexgc | 35.34% | ||
| OM | 6.98% | ||
| PM (TTM) | 3.53% | ||
| GM | 87.64% | ||
| FCFM | 9.21% |
ROA(3y)6.03%
ROA(5y)3.77%
ROE(3y)17.58%
ROE(5y)10.76%
ROIC(3y)10.58%
ROIC(5y)9.5%
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.24%
ROCE(5y)14.58%
ROICexcg growth 3Y243.73%
ROICexcg growth 5YN/A
ROICexc growth 3Y-0.59%
ROICexc growth 5Y-11.51%
OM growth 3Y0.09%
OM growth 5Y-3.26%
PM growth 3YN/A
PM growth 5Y-4.85%
GM growth 3Y-3.72%
GM growth 5Y-1.96%
F-Score6
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 71.86% | ||
| Cap/Sales | 1.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 120.11% | ||
| Profit Quality | 260.82% | ||
| Current Ratio | 1.73 | ||
| Quick Ratio | 1.73 | ||
| Altman-Z | 2.53 |
F-Score6
WACC9.06%
ROIC/WACC0.73
Cap/Depr(3y)69.64%
Cap/Depr(5y)53.79%
Cap/Sales(3y)0.98%
Cap/Sales(5y)0.91%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-7.33%
EPS 3Y17.99%
EPS 5Y2.89%
EPS Q2Q%-1.37%
EPS Next Y-6.9%
EPS Next 2Y0.25%
EPS Next 3Y5.61%
EPS Next 5YN/A
Revenue 1Y (TTM)6.81%
Revenue growth 3Y18.27%
Revenue growth 5Y7.19%
Sales Q2Q%7.47%
Revenue Next Year6.33%
Revenue Next 2Y4.69%
Revenue Next 3Y4.32%
Revenue Next 5YN/A
EBIT growth 1Y-5.34%
EBIT growth 3Y18.37%
EBIT growth 5Y3.69%
EBIT Next Year47.68%
EBIT Next 3Y17.69%
EBIT Next 5YN/A
FCF growth 1Y-35.16%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-31.13%
OCF growth 3YN/A
OCF growth 5YN/A