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It's been a good week for Heidrick & Struggles International, Inc. (NASDAQ:HSII) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.3% to US$40.68. It was a pretty mixed result, with revenues beating expectations to hit US$284m. Statutory earnings fell 7.9% short of analyst forecasts, reaching US$0.62 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Heidrick & Struggles International after the latest results.
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Taking into account the latest results, Heidrick & Struggles International's three analysts currently expect revenues in 2025 to be US$1.13b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 637% to US$2.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.08b and earnings per share (EPS) of US$2.69 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for Heidrick & Struggles International
Despite these upgrades,the analysts have not made any major changes to their price target of US$50.67, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Heidrick & Struggles International analyst has a price target of US$56.00 per share, while the most pessimistic values it at US$44.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Heidrick & Struggles International's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.0% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Heidrick & Struggles International.