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The Hackett Group, Inc. (HCKT) Hit a 52 Week High, Can the Run Continue?

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Have you been paying attention to shares of Hackett Group (HCKT - Free Report) ? Shares have been on the move with the stock up 7.6% over the past month. The stock hit a new 52-week high of $24.08 in the previous session. Hackett Group has gained 17% since the start of the year compared to the -14.3% move for the Zacks Business Services sector and the -19.4% return for the Zacks Consulting Services industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 22, 2022, Hackett Group reported EPS of $0.33 versus consensus estimate of $0.29 while it beat the consensus revenue estimate by 5.97%.

For the current fiscal year, Hackett Group is expected to post earnings of $1.38 per share on $298.35 million in revenues. This represents a 6.11% change in EPS on a 7.48% change in revenues. For the next fiscal year, the company is expected to earn $1.55 per share on $327 million in revenues. This represents a year-over-year change of 11.87% and 9.6%, respectively.

Valuation Metrics

Hackett Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Hackett Group has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 17.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 21.6X. On a trailing cash flow basis, the stock currently trades at 18.9X versus its peer group's average of 19X. Additionally, the stock has a PEG ratio of 1.12. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Hackett Group currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Hackett Group passes the test. Thus, it seems as though Hackett Group shares could have a bit more room to run in the near term.

How Does HCKT Stack Up to the Competition?

Shares of HCKT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Huron Consulting Group Inc. (HURN - Free Report) . HURN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of C.

Earnings were strong last quarter. Huron Consulting Group Inc. beat our consensus estimate by 3.90%, and for the current fiscal year, HURN is expected to post earnings of $3.04 per share on revenue of $993.03 million.

Shares of Huron Consulting Group Inc. have gained 18.7% over the past month, and currently trade at a forward P/E of 17.89X and a P/CF of 14.25X.

The Consulting Services industry is in the top 34% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HCKT and HURN, even beyond their own solid fundamental situation.


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