Huron Consulting Q3 Earnings: Can NasdaqGS:HURN Hit Its $0.27 EPS Target?

in EARNINGS/INVESTING IDEAS by

Huron Consulting Group Inc. (NasdaqGS:HURN) is scheduled to report Q3 earnings results after markets close for trading on November 2, 2020.

The company is expected to report earnings of $0.27/share on revenue of $200.7 million. The consensus earnings per share (EPS) of $0.27/share is based on a poll of 4 analysts and represents a decline in eps of −65.5% over the same quarter last year, when the company reported earnings of $0.79/share.

The revenue forecast of $200.7 million based on a poll of 4 analysts implies a year-over-year (YoY) decline in revenue of −8.5%. Last year the company reported $219.3 million in revenue for the quarter.

Expected to report EPS contraction of −65.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $200.73 $219.29 −8.5%
EPS $0.27 $0.79 −65.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Huron Consulting Group Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.18 $0.68 267.6% Beat
Q1, 2020 $0.38 $0.44 17.3% Beat
Q4, 2019 $0.64 $0.79 23.4% Beat
Q3, 2019 $0.66 $0.79 20.6% Beat
Q2, 2019 $0.61 $0.76 25.1% Beat
Q1, 2019 $0.33 $0.40 21.2% Beat
Q4, 2018 $0.67 $0.66 −0.8% Missed
Q3, 2018 $0.59 $0.64 8.0% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $43.83 $47.72 8.9% Increase
April 30, 2020 $56.48 $46.97 −16.8% Decline
February 25, 2020 $64.85 $65.94 1.7% Increase
October 29, 2019 $60.65 $66.49 9.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.97, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.97 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Huron Consulting Group Inc. is currently trading at $41.91/share, down −1.6% for the day. The company is trading at approximately 59.1% of its 52-week high of $70.91/share. The company’s stock price is down −12.2% since the last earnings report and down −1.7% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 51.12 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:HURN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −1,410.11 and a forward P/E multiple of 24.12.

Huron Consulting Group Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.69. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $41.91
P/E Ratio −1,410.1x
P/E Ratio (Fwd) 24.1x
PEG Ratio 13.9
Total Debt / Total Capital 30.9%
Levered Free Cash Flow $129 million
EV / EBITDA 11.5x

Finbox

Huron Consulting Group Inc. is a small-cap stock with a market capitalization of $903.9 million and a total enterprise value of $1.232 billion. The company operates in the Industrials sector and the Professional Services industry.

Huron Consulting Group Inc., a professional services firm, provides advisory, technology, and analytic solutions in the United States and internationally. Its Healthcare segment provides advisory services in financial and operational improvement, care transformation, culture and organizational excellence, strategy, and technology and analytics to national and regional hospitals, integrated health systems, academic medical centers, community hospitals, and medical groups. The company’s Education segment offers consulting and technology solutions related to business and technology strategy, financial and operational excellence, student success, research administration, and regulatory compliance for higher education institutions and academic medical centers. Its Business Advisory segment provides capital advisory, transaction advisory, operational improvement, restructuring and turnaround, valuation, and dispute advisory services; technology and analytic solutions that enable organizations to manage their financial performance, operational efficiency, and client or stakeholder experience; and strategic solutions to pharmaceutical, medical device, and biotechnology companies. This segment provides its services to large and middle market organizations, not-for-profit organizations, lending institutions, law firms, investment banks, and private equity firms. The company serves the aerospace, automotive, energy and utilities, financial services, government, life sciences, logistics, manufacturing, metals and mining, retail and consumer products, technology, media, and telecommunications industries. Huron Consulting Group Inc. was founded in 2002 and is headquartered in Chicago, Illinois.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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