HURON CONSULTING GROUP INC. (HURN): what the price requires

The current priced-in claim for HURON CONSULTING GROUP INC. (HURN) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/HURN

Headline

FieldValue
TickerHURN
CompanyHURON CONSULTING GROUP INC.
Current price$111.38/sh
CompositionConsulting and Managed Services 59% / Digital 41%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed1.5%
Operating margin today9.7%
Margin compression implied-8.2pp
Multiple paid16x operating income

The operating-margin requirement is derived from the framework's value band at year 10, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.8% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~9.8%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.14σ
cohort percentile (of 225 peers)28
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.73x5expensive
Earnings2.39x3expensive
Relative1.01x3expensive
Growth0.63x3justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$233.790.48xyesFCF base $0.1B, growth 12% (input: historical growth), terminal g 4.0%, WACC 7.7%, 6yr projection
DCF Exit MultipleGrowth$176.650.63xyesExit EV/EBITDA: 10.9x / 12.9x / 14.9x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$110.231.01xyesP/E 18x (static sector reference · 2026-04), scenarios: 14.9x / 18.0x / 21.1x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$64.441.73xyesBV/sh $22.83, ROE (TTM) 26.1%, ke 9.3%
Two-Stage Excess ReturnAsset$109.371.02xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$115.950.96xyesRev $1.7B, growth 12% (input: historical growth; tapered), Terminal P/S: 0.9x / 1.1x / 1.3x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$46.642.39xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.14B × (1−14%) / WACC 7.7% → EPV (no growth)
Residual IncomeAsset$96.011.16xyesBV $22.83 + 5yr PV of (ROE (TTM) 26.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$54.822.03xyes√(22.5 × EPS $5.85 × BVPS $22.83) — Graham's conservative floor
EV/EBITDA RelativeRelative$100.571.11xyesEBITDA $0.22B × sector EV/EBITDA 12.0x
FCF YieldEarnings$27.424.06xyesFCF $123.8M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$0.0111137.50xyesSBC-adj FCF $0.08B (FCF $0.12B − SBC $0.05B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$4.9022.73xyesEPS $5.85 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$7.4115.03xyesBV $22.83 × (ROIC 2.5% / WACC 7.7%)
P/Sales SectorRelative$250.890.44xyesRevenue $1.75B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$63.241.76xyesEPS $5.85 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$828.3m
Net debt / NOPAT (after-tax)5.85x
Net debt / operating income (pre-tax)5.02x
Share count CAGR (buyback)-4.8%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Start with the balance sheet and what management is doing with it, because the capital-allocation signal here is loud. Huron's board raised its share-repurchase authorization to $900 million from $700 million and the company bought back about $155 million of stock in the first quarter alone, with the share count falling roughly 5% a year. A firm that is borrowing modestly and using its cash flow to retire a meaningful slice of its shares each year is telling you, in the one language that cannot be faked, that management believes the stock is cheap. That conviction is backed by a business that just grew revenue 12% with record healthcare results.

The operating momentum supports the confidence. Huron affirmed full-year 2026 guidance of $1.78 billion to $1.86 billion in revenue, assuming low double-digit growth and continued margin expansion, with the Healthcare segment operating margin reaching 30.5% for the year. Healthcare and education are large, structurally pressured end markets, hospitals and universities under constant cost and operational strain, which is exactly the environment that creates demand for consulting and managed services. The Digital segment, now a large share of the business, extends Huron from advice into implementation and technology, a higher-growth and stickier engagement model.

The moat in professional services is reputation and relationships, and Huron's is built. The firm states its ability to win work "depends heavily upon our reputation and the individual reputations of our professionals", and in healthcare and education that reputation compounds: a successful engagement leads to the next one, and specialized expertise in regulated, complex verticals is hard for a generalist to replicate. The bull case is a focused consulting franchise growing double digits, expanding margins, and aggressively returning capital at a valuation the methods read as cheap.

Bear Case

The external variable with the most leverage on Huron is the health of its client industries' budgets, and that is not under its control. Consulting demand is discretionary and cyclical: when hospitals, universities, and corporations tighten spending, advisory and project work is among the first line items cut. Healthcare and education in particular are exposed to policy and funding shifts, changes in reimbursement, federal education funding, and regulatory cycles that can swing client demand sharply. A firm concentrated in those verticals enjoys deep expertise in good times and concentrated exposure in bad ones, and the price assumes the demand stays firm.

The cost structure makes a demand slowdown bite fast. Huron's costs are its people, and management has acknowledged that rising compensation and contractor costs, along with integration spending from acquisitions, could pressure margins if project growth softens. In a people business, utilization is everything: if engagements slow while the firm is carrying the consultants and contractors hired for growth, margins compress quickly and the operating leverage runs in reverse. The first-quarter cost commentary is the company itself flagging that the margin expansion in its guidance is not guaranteed.

Competition keeps a ceiling on the economics even when demand is good. Huron competes against "specialty consulting firms; consulting divisions of our technology partners; and the internal professional resources of organizations" across all its segments, a crowded field that ranges from the largest global consultancies to clients' own internal teams. That competition limits pricing power and means Huron must keep winning on reputation and results rather than scale. The leverage profile adds a final consideration: net debt of about $828 million runs near four-and-a-half times operating income, modest in a strong year but a constraint if a consulting downturn coincides with the aggressive buyback drawing on the same cash flow. The bear case is a cyclical, people-driven, competitive business priced as though the double-digit growth and margin expansion continue uninterrupted.

Valuation

The price works out to roughly 14 times company-wide operating income, a multiple so low that it sits below what even a modest annual decline in operating profit would warrant. Read that as a bound rather than a solved figure: the market is paying a price that builds in flat-to-declining profit, not growth. For a firm guiding to low double-digit revenue growth and margin expansion, that is a value read, and it is precisely why management's aggressive buyback makes sense, retiring shares at a price the methods say is cheap relative to the business's earning power.

The methods split in the pattern of an undervalued grower. The relative-multiple and growth-DCF lenses support the price, while the earnings-power lens, which capitalizes current earnings with no growth, reads it as expensive, a normal result for a profitable services firm where the value lives in continued growth rather than the static earnings stream. The asset-value lens is modestly above the price, reflecting that a consulting firm carries little hard book value relative to its market price. The composite is a reasonably valued, even cheap, services business, not a stretch beyond what standard methods support.

Solvency is a supporting consideration rather than the crux, with one caveat. Net debt of about $828 million sits near four-and-a-half times operating income, manageable while the firm is growing and generating cash, and the falling share count shows that cash is being returned rather than hoarded. The risk is the interaction: an aggressive buyback funded partly by debt is comfortable in a strong consulting market and tighter if demand turns down while the leverage stays on. The downside is bounded less by the balance sheet than by the cyclicality of consulting demand. The valuation rests on whether the double-digit growth and the healthcare-led margin expansion persist, and management's willingness to buy back stock at this price is its own answer to where it sees value.

Catalysts

The clearest catalyst is the revenue-and-margin execution against affirmed guidance. Huron affirmed full-year 2026 revenue of $1.78 billion to $1.86 billion with adjusted EPS of $8.35 to $9.15, after a first quarter that grew 12% with record healthcare revenue. Each quarter is a test of whether healthcare and digital demand sustains the low-double-digit growth and whether the margin expansion holds against rising labor and integration costs. Healthcare segment momentum, where operating margin reached 30.5%, is the line most worth tracking.

The capital-return pace is the second catalyst and the most direct read on management's conviction. With the buyback authorization raised to $900 million and roughly $155 million already deployed in the first quarter, the size of repurchases in coming quarters signals how cheap management considers the stock and how much of the cash flow goes to shrinking the share count. On the risk side, the cost commentary is the early-warning indicator: if management flags compensation or contractor costs outpacing revenue, or integration spending pressuring margins, that is the signal the margin-expansion half of the thesis is under strain. The next earnings calls' commentary on demand and cost trends is where the picture clarifies.

Peer Cohorts (Per Segment, With Filing Citations)

Healthcare (reported)

Education (reported)

Commercial (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 FY2026 results, 2026 · company materials, 2026 · company FY2025 10-K · company FY2026 guidance · company commentary, 2026

View the full interactive HURN report on boothcheck