The consulting industry has been witnessing exponential growth since the 2008 financial crisis, enjoying steady revenues, profit and cash-flow growth. Economic strength, encouraging service activities, increased adoption and the success of the work-from-home trend enable industry players to support strong demand environment.
The Zacks-defined Consulting industry is currently within the top 7% of the Zacks Industry Rank. Since the computer storage devices industry is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
At this stage, we recommend five consulting stocks with a favorable Zacks Rank and strong near-term price upside to strengthen your portfolio. These are Huron Consulting Group Inc. HURN, CBIZ Inc. CBZ, Stantec Inc. STN, Information Services Group Inc. III and CRA International Inc. CRAI.
Strong Demand Environment
The consulting services industry is one of those least affected by the pandemic and its after-effects. This is because even in a volatile situation, organizations require extensive advice on protecting their employees and staying closer to consumers and shareholders.
The consulting industry is one of the earliest pioneers of remote working that has become part of the new normal. The nature of work enables industry players to function efficiently through the increased use of technology.
The chart below shows the price performance of our five picks year to date.
Zacks Investment Research
Image Source: Zacks Investment Research
Huron Consulting Group Inc.
Huron Consulting Group is an independent provider of financial and operational consulting services in the United States and internationally. HURN operates through three segments: Healthcare, Education, and Commercial. HURN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HURN’s experienced and credentialed professionals employ their expertise in accounting, finance, economics and operations to a wide variety of both financially sound and distressed organizations, including Fortune 500 companies, medium-sized businesses, leading academic institutions, healthcare organizations and the law firms that represent these various organizations.
Huron Consulting Group has an expected revenue and earnings growth rate of 8.9% and 10.5%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 3.5% in the last 60 days.
The average short-term price target of brokerage firms represents an increase of 25% from the last closing price of $137.21. The brokerage target price is currently in the range of $165 to $180. This indicates a maximum upside of 31.2% and no downside.
CBIZ Inc.
Zacks Rank #1 CBIZ provides professional business services that help clients better manage their finances and employees. CBZ provides its clients with financial services including accounting, tax, financial advisory, government health care consulting, risk advisory, merger and acquisition advisory, real estate consulting, and valuation services. Employee services include employee benefits consulting, property and casualty insurance, retirement plan consulting, payroll, life insurance, HR consulting, and executive recruitment.
As one of the nation's largest brokers of employee benefits and property and casualty insurance, and one of the largest accounting and valuation companies in the United States, CBZ’s services are provided through nearly 100 company offices in 32 states.
CBIZ has an expected revenue and earnings growth rate of 61.4% and 36%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 23.1% in the last 60 days.
The average short-term price target of brokerage firms represents an increase of 19.1% from the last closing price of $77.24. The brokerage target price is currently in the range of $86 to $95. This indicates a maximum upside of 23% and no downside.
Stantec Inc.
Zacks Rank #1 Stantec provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying and geomatics. STN also provides professional consulting services in environmental sciences, project management, and project economics for infrastructure and facilities projects.
STN’s services include, or relate to, the development of conceptual plans, zoning approval of design infrastructure, transportation planning, traffic engineering, landscape architecture, urban planning, design construction review and surveying. STN provides knowledge-based solutions for infrastructure and facilities projects through value-added professional services principally under fee-for-service agreements with clients.
Stantec has an expected revenue and earnings growth rate of 7.3% and 14.2%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 0.3% in the last seven days.
The average short-term price target of brokerage firms represents an increase of 17.5% from the last closing price of $86.60. The brokerage target price is currently in the range of $94.50 to $103.60. This indicates a maximum upside of 19.6% and no downside.
Information Services Group Inc.
Zacks Rank #2 Information Services Group operates as an artificial intelligence (AI)-centered technology research and advisory company in the Americas, Europe, and the Asia Pacific. III offers digital transformation services, including sourcing advisory and cloud and data analytics, managed governance and risk, network carrier, technology strategy and operations design, change management, and market intelligence and technology research and analysis services.
III also provides ISG Digital, a client solution platform focused on developing technology, transformation, sourcing, and digital solutions, ISG Enterprise, a client solution platform that helps clients manage change and optimize operations in such areas as finance, human resource, and training.
In addition, III offers ISG Research; ISG Network and Software Advisory services; and ISG GovernX and ISG Tango software platforms. III serves private sector clients operating in the manufacturing, banking and financial services, insurance, health sciences, energy and utilities, and consumer services industries, and public sector clients, including state and local governments, airport and transit authorities, and national and provincial government units.
Information Services Group has an expected revenue and earnings growth rate of -2.6% and 35%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 3.9% in the last 60 days.
The average short-term price target of brokerage firms represents an increase of 42.6% from the last closing price of $3.67. The brokerage target price is currently in the range of $3.75 to $7. This indicates a maximum upside of 90.7% and no downside.
CRA International Inc.
Zacks Rank #2 CRA International provides economic, financial, and management consulting services worldwide. CRAI advises clients on economic and financial matters pertaining to litigation and regulatory proceedings; and guides corporations through business strategy and performance-related issues.
CRAI also offers consulting services, including research and analysis, expert testimony, and comprehensive support in litigation and regulatory proceedings in the areas of finance, accounting, economics, insurance, and forensic accounting and investigations to corporate clients and attorneys.
CRAI has a highly qualified employee base, which helps it attract new clients. Collaborations with academic experts further enhance its expertise and help it build solid client relationships. Presence across North America and Europe is encouraging because these markets cater to diverse industries, thus representing an attractive growth opportunity.
CRA International has an expected revenue and earnings growth rate of 4.4% and 2%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 1.3% in the last 60 days.
The average short-term price target of brokerage firms represents an increase of 44.8% from the last closing price of $164.25. The brokerage target price is currently in the range of $224 to $247. This indicates a maximum upside of 50.5% and no downside.
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