On Wednesday, Truist Securities sustained its Buy rating on Huron Consulting Group (NASDAQ:HURN) with a consistent price target of $140.00. The firm's stance comes after reviewing the company's expected revenue and profit distribution for the latter half of the year, which deviates from its typical pattern.
The analyst from Truist Securities has adjusted the firm's model to mirror the revenue and profit distribution for the third and fourth quarters of 2024 as outlined by Huron Consulting Group's management during a conference in September. Contrary to the company's historical trend, where the fourth quarter usually sees a sequential decline, the expected distribution for this period is different.
Despite these adjustments, Truist Securities' annual estimates for Huron Consulting Group remain unchanged. The firm continues to project revenues of $1.480 billion, an adjusted EBITDA of $197 million, and earnings per share (EPS) of $6.00 for the year. These figures reflect the analyst's confidence in the consulting group's performance.
Looking ahead, Truist Securities has not only reaffirmed its estimates for the year 2025 but also introduced projections for 2026. The firm anticipates that Huron Consulting Group will achieve sales of $1.648 billion, an adjusted EBITDA of $228 million, and an EPS of $7.16 in 2026.
The analyst's remarks and projections for Huron Consulting Group are based on the latest information presented by the company's management, which indicates a shift in the usual seasonal revenue and profit patterns for the upcoming quarters.
In other recent news, Huron Consulting Group has reported record revenues for the second quarter of 2024, marking a 7.2% increase year-over-year to reach $371.7 million. This growth was largely driven by the healthcare and education segments, which saw revenue increases of 9% and 11% respectively. Despite a 6% decline in the commercial segment, the company's adjusted earnings per share saw a significant rise of 20%, and the adjusted EBITDA margin expanded to 15%.
Huron Consulting Group also revised its annual revenue guidance to a range of $1.46 billion to $1.5 billion, while raising its adjusted EBITDA margin guidance to between 13% and 13.5%. The company anticipates sequential revenue growth in the latter half of 2024 and remains confident in achieving a mid-teen EBITDA margin by 2025.
These recent developments come alongside Huron's ongoing initiatives in artificial intelligence and automation, which are expected to positively impact margins. However, the company has also noted a decrease in commercial segment revenues due to softer demand.
Despite this, Huron Consulting Group expects a decrease in interest expense in the coming quarters and remains optimistic about future growth, particularly in the commercial and healthcare segments.
InvestingPro Insights
To complement Truist Securities' analysis, InvestingPro data offers additional insights into Huron Consulting Group's financial position. The company's market capitalization stands at $1.77 billion, with a P/E ratio of 24.85, suggesting investors are willing to pay a premium for its earnings. This aligns with the positive outlook presented by Truist Securities.
InvestingPro Tips highlight that Huron's management has been aggressively buying back shares, which often signals confidence in the company's future prospects. This action supports the bullish stance taken by Truist Securities. Additionally, the company's liquid assets exceed short-term obligations, indicating a strong financial position to support its growth plans.
However, it's worth noting that three analysts have revised their earnings downwards for the upcoming period, which investors should consider alongside Truist's optimistic projections. The company's revenue growth of 12.76% over the last twelve months and an EBITDA growth of 13.51% in the same period demonstrate solid performance, aligning with Truist's positive outlook for future years.
For readers interested in a more comprehensive analysis, InvestingPro offers 5 additional tips for Huron Consulting Group, providing a deeper understanding of the company's financial health and market position.
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