HSII
Heidrick & Struggles International, Inc.
$59.01
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 55.4% below fair value
You pay
$59.01
Bear
$106.72
Fair
$132.43
Bull
$157.01
Bear
$106.72
+80.8%
5% stage 1 growth, 11% discount
Fair
$132.43
+124.4%
9% stage 1 growth, 11% discount
Bull
$157.01
+166.1%
12% stage 1 growth, 11% discount
Adjust Assumptions
9.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
6.7x
Market is pricing in (growth)
-6.5%
vs 9.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$59.00
Divergence from AlphaVal
124%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $132.43 per share.
Warnings
Stock-based employee pay equals 146% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $59.00 (from 5 analysts). Our estimate is 124% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions