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1. Company Snapshot

1.a. Company Description

The Hackett Group, Inc.operates as a strategic advisory and technology consulting firm primarily in North America and internationally.It offers best practice intelligence center, an online searchable repository; best practice accelerators that provide web-based access to best practices, customized software configuration tools, and best practice process flows; advisor inquiry for access to fact-based advice on proven approaches and methods; best practice research that provides insights into the proven approaches; and peer interaction comprising member-led webcasts, annual best practice conferences, annual member forums, membership performance surveys, and client-submitted content, as well as intellectual property as-a-service and Hackett Institute programs.


The company's benchmarking services conduct studies for selling, general and administrative, finance, human resources, information technology, procurement, enterprise performance management, and shared services; and business transformation practices to help clients develop coordinated strategy for achieving performance enhancements across the enterprise.It also provides Oracle EEA solutions for core financial close and consolidation, integrated business planning, and reporting/advanced analytics areas.In addition, the company offers SAP solutions, including planning, architecture, and vendor evaluation and selection through implementation, customization, testing, and integration; post-implementation support, change management, exception management, process transparency, system documentation, and end-user training; off-shore application development, and application maintenance and support services; and OneStream practice that helps clients choose and deploy OneStream XF Platform and Market Place solutions.


The company was formerly known as Answerthink, Inc.and changed its name to The Hackett Group, Inc.in 2008.


The Hackett Group, Inc.was founded in 1991 and is headquartered in Miami, Florida.

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1.b. Last Insights on HCKT

The Hackett Group's recent performance was negatively impacted by the escalating adoption of generative artificial intelligence (Gen AI) in various industries, leading to increased competition and pressure on the company's consulting and advisory services. The rapid acceleration of Gen AI initiatives, with 89% of executives fast-tracking their adoption, poses a challenge to The Hackett Group's ability to maintain its market share and revenue growth. Furthermore, the company's focus on Gen AI has led to a surge in HR workloads, with a 10% increase expected in 2025, while budgets shrink by 1.5%.

1.c. Company Highlights

2. Hackett Group's Q3 Results: A Mixed Bag with Promising AI Developments

The Hackett Group reported revenues before reimbursements of $72.2 million, slightly below quarterly guidance, and adjusted earnings per share of $0.37, in line with the midpoint of guidance. The company's adjusted gross margin as a percentage of revenues before reimbursements was not explicitly stated, but the guidance for the fourth quarter is expected to be approximately 46% to 47%. The actual EPS of $0.37 met analysts' estimates, indicating a stable performance.

Publication Date: Nov -24

📋 Highlights
  • Revenue & Earnings Performance:: Reported $72.2M in pre-reimbursement revenue (below guidance) and $0.37 adjusted EPS (midpoint of guidance).
  • AI XPLR V4 Adoption:: Version 4 of the GenAI platform is "game-changing," enabling 80% solutions in <1 hour vs. 4–6 weeks previously.
  • Strategic Alliances:: Launched partnership with Celonis and plans 1–2 major alliances, with IP integration boosting Agentic AI capabilities.
  • Fourth Quarter Outlook:: Guidance for $69.5M–$71M revenue and $0.38–$0.40 adjusted EPS, with 46–47% gross margin.
  • Share Repurchase Plan:: Announced $40M Dutch tender offer at $18.30–$21/share, expiring December 2025, funded by credit facility.

Segment Performance

The Global S&BT segment experienced a mixed performance, with GenAI-related revenue growth being offset by weakness in the OneStream practice and the expiration of an IPaaS contract. Excluding these decreases, the segment would have been up 4%. The Oracle Solutions segment was down due to extended client decision-making, while the SAP Solutions segment was up due to implementation services related to software sales.

AI XPLR Platform Developments

The company's AI XPLR platform version 4 has been well-received, with one potential partner referring to its capabilities as "game changing." The platform's ability to inform the client's capability from its existing technology or automation footprint is a significant change, allowing for more powerful ideation capabilities. As Ted Fernandez stated, "this capability has resulted in more powerful ideation capabilities and has allowed us to gain more information around the client's automation footprint."

Valuation and Outlook

With a P/E Ratio of 45.74 and an EV/EBITDA of 19.64, the company's valuation appears to be relatively high. Analysts estimate next year's revenue growth at -0.5%, indicating a potential decline. However, the company's advancements in AI technology and its potential partnerships may drive future growth. The announced $40 million Dutch tender offer to purchase its common stock may also impact the company's valuation.

Strategic Priorities

The company is focusing on digital transformation and GenAI technologies, with plans to announce alliances that could significantly change its opportunities. The company's GenAI platform capabilities, available in version 4 of AI XPLR, leverage a proprietary solution language model and Hackett process and performance IP, accelerating the speed of identifying and designing Agentic AI solutions. With a strong pipeline of potential partners and a growing demand for digital transformation, the company is well-positioned for future growth.

3. NewsRoom

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The Hackett Group, Inc. $HCKT Shares Sold by Intech Investment Management LLC

Dec -01

Source: defenseworld.net

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Boston Partners Buys 9,477 Shares of The Hackett Group, Inc. $HCKT

Nov -29

Source: defenseworld.net

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The Hackett Group® Identifies Leading Accounts Payable Solutions Delivering 3.5X Productivity Gains Through AI Innovation

Nov -19

Source: businesswire.com

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The Hackett Group®: Learning and Development Leaps Forward Through AI-Powered Solutions

Nov -17

Source: businesswire.com

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Critical Contrast: The Hackett Group (NASDAQ:HCKT) vs. CBIZ (NYSE:CBZ)

Nov -17

Source: defenseworld.net

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The Hackett Group®: European SG&A Costs Rise to Highest Level Since 2020

Nov -12

Source: businesswire.com

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The Hackett Group® 2025 Working Capital Survey: Europe Shows Deterioration in Cash Conversion Cycle as Financial Strain Deepens

Nov -10

Source: businesswire.com

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The Hackett Group, Inc. Commences $40 Million Dutch Auction Tender Offer

Nov -05

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.37%)

6. Segments

Global Strategy and Business Transformation

Expected Growth: 3%

The 3% growth in Global Strategy and Business Transformation is driven by increasing demand for digital transformation, need for cost reduction and operational efficiency, and growing importance of strategic planning and execution. Additionally, companies are seeking to improve customer experience, enhance innovation, and stay competitive in a rapidly changing market.

Oracle

Expected Growth: 5%

Oracle's 5% growth driven by increasing adoption of cloud-based services, expansion into new markets, and strategic acquisitions. Strong demand for digital transformation, cybersecurity, and data analytics solutions also contribute to growth. Additionally, Oracle's focus on innovation, customer relationships, and operational efficiency further support its growth momentum.

System Analysis Program

Expected Growth: 2%

The 2% growth of System Analysis Program from The Hackett Group, Inc. is driven by increasing demand for digital transformation, cost reduction, and operational efficiency. Additionally, the growing need for data-driven decision making, and the rising adoption of cloud-based solutions are contributing to the growth.

7. Detailed Products

Benchmarking

The Hackett Group's benchmarking services provide clients with a comprehensive analysis of their business processes and performance metrics, identifying opportunities for improvement and cost reduction.

Business Transformation

Hackett's business transformation services help clients redesign and optimize their business processes, organizational structures, and technology platforms to achieve strategic objectives.

ERP and IT Transformation

Hackett's ERP and IT transformation services help clients select, implement, and optimize their enterprise resource planning (ERP) systems and IT infrastructure.

Global Business Services

Hackett's global business services provide clients with a range of services, including finance and accounting, human resources, procurement, and information technology.

Strategy and Operations Consulting

Hackett's strategy and operations consulting services help clients develop and implement strategic plans, improve operational efficiency, and optimize business processes.

Working Capital Optimization

Hackett's working capital optimization services help clients optimize their working capital, including cash flow, accounts receivable, and inventory management.

8. The Hackett Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Hackett Group, Inc. is medium due to the presence of alternative consulting firms and internal capabilities of clients.

Bargaining Power Of Customers

The bargaining power of customers for The Hackett Group, Inc. is high due to the concentration of clients in a few industries and the availability of alternative service providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Hackett Group, Inc. is low due to the availability of skilled professionals and the lack of concentration in the labor market.

Threat Of New Entrants

The threat of new entrants for The Hackett Group, Inc. is medium due to the moderate barriers to entry and the presence of established players in the industry.

Intensity Of Rivalry

The intensity of rivalry for The Hackett Group, Inc. is high due to the presence of established players and the need to differentiate services to attract and retain clients.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.65%
Debt Cost 8.32%
Equity Weight 72.35%
Equity Cost 8.32%
WACC 8.32%
Leverage 38.22%

11. Quality Control: The Hackett Group, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ISG

A-Score: 5.6/10

Value: 4.5

Growth: 2.7

Quality: 5.5

Yield: 6.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
TaskUs

A-Score: 5.3/10

Value: 5.1

Growth: 8.2

Quality: 5.5

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Hackett

A-Score: 5.1/10

Value: 4.1

Growth: 5.1

Quality: 6.7

Yield: 5.0

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Xerox

A-Score: 4.7/10

Value: 9.8

Growth: 2.3

Quality: 3.0

Yield: 10.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
CSP

A-Score: 3.6/10

Value: 7.6

Growth: 2.8

Quality: 4.2

Yield: 1.0

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Unisys

A-Score: 3.5/10

Value: 9.8

Growth: 2.2

Quality: 4.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.43$

Current Price

19.43$

Potential

-0.00%

Expected Cash-Flows