Huron (HURN, Financial) has revealed plans to acquire Eclipse Insights, a consulting firm specializing in revenue cycle management for healthcare providers. The acquisition aims to bolster Huron's capacity to enhance revenue cycles and operational efficiency amidst the challenges of tight margins, staff shortages, reduced reimbursements, and increased insurance claim denials faced by healthcare organizations. The integration will see approximately 40 employees from Eclipse Insights joining Huron's Healthcare division. Although the financial details of the transaction have not been made public, the deal is anticipated to finalize before the end of this month.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Huron Consulting Group Inc (HURN, Financial) is $170.75 with a high estimate of $180.00 and a low estimate of $165.00. The average target implies an upside of 25.89% from the current price of $135.63. More detailed estimate data can be found on the Huron Consulting Group Inc (HURN) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Huron Consulting Group Inc's (HURN, Financial) average brokerage recommendation is currently 1.4, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Huron Consulting Group Inc (HURN, Financial) in one year is $131.14, suggesting a downside of 3.31% from the current price of $135.63. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Huron Consulting Group Inc (HURN) Summary page.
HURN Key Business Developments
Release Date: April 29, 2025
- Revenue Before Reimbursable Expenses (RBR): $395.7 million, up 11.2% from $356 million in Q1 2024.
- Net Income: $24.5 million, a 36.3% increase from $18 million in Q1 2024.
- Adjusted EBITDA: $41.5 million, representing 10.5% of RBR, compared to $33.8 million or 9.5% of RBR in Q1 2024.
- Adjusted Net Income: $31.1 million or $1.68 per diluted share, a 36.6% increase from $23.3 million or $1.23 per diluted share in Q1 2024.
- Healthcare Segment RBR: $198.5 million, up 9.8% from Q1 2024.
- Education Segment RBR: $122.7 million, up $11.2 million from Q1 2024.
- Commercial Segment RBR: $74.5 million, up 17% from Q1 2024.
- Operating Income Margin - Healthcare: 28.4% in Q1 2025, up from 23.6% in Q1 2024.
- Operating Income Margin - Education: 18.8% in Q1 2025, down from 19.7% in Q1 2024.
- Operating Income Margin - Commercial: 15.2% in Q1 2025, down from 22.1% in Q1 2024.
- Cash Flow Used in Operations: $106.8 million in Q1 2025.
- Free Cash Flow: Negative $115.4 million in Q1 2025.
- Days Sales Outstanding (DSO): 79 days in Q1 2025, down from 91 days in Q1 2024.
- Total Debt: $576.3 million as of March 31, 2025.
- Net Debt: $552.9 million as of March 31, 2025.
- Leverage Ratio: 2.2x adjusted EBITDA as of March 31, 2025.
- Share Repurchases: $72.9 million used to repurchase approximately 509,000 shares in Q1 2025.
- Guidance for 2025: RBR in the range of $1.58 billion to $1.66 billion, adjusted EBITDA margin of 14% to 14.5%, and adjusted EPS of $6.80 to $7.60.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Huron Consulting Group Inc (HURN, Financial) reported an 11% increase in revenues before reimbursable expenses (RBR) over the first quarter of 2024, driven by strong growth across all three operating segments.
- The Healthcare segment saw a 10% growth in RBR, primarily due to strong demand for performance improvement and financial advisory offerings.
- The Education segment experienced a 10% increase in RBR, fueled by demand for strategy and operations, advancement offerings, and software products.
- The Commercial segment achieved a 17% growth in RBR, with significant contributions from the acquisition of AXIA and strong demand for digital offerings.
- Huron Consulting Group Inc (HURN) reaffirmed its annual guidance for 2025, indicating confidence in its growth strategy and market positioning.
Negative Points
- Despite revenue growth, the Commercial segment's operating income margin decreased from 22.1% in Q1 2024 to 15.2% in Q1 2025, due to increased compensation costs and contractor expenses.
- The Education segment's operating income margin declined from 19.7% in Q1 2024 to 18.8% in Q1 2025, impacted by expenses related to leadership meetings and performance bonuses.
- The company faced increased operating expenses in the Healthcare segment, with many clients experiencing operating expenses outpacing reimbursements.
- Huron Consulting Group Inc (HURN) reported a negative free cash flow of $115.4 million for the first quarter of 2025, reflecting annual incentive payments and capital expenditures.
- The leverage ratio increased to 2.2x adjusted EBITDA as of March 31, 2025, primarily due to annual bonus payments and share repurchases.
