HSII
Heidrick & Struggles International, Inc.
$59.01
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 49.9% below fair value
You pay
$59.01
Bear
$94.89
Fair
$117.74
Bull
$139.60
Bear
$94.89
+60.8%
5% stage 1 growth, 11% discount
Fair
$117.74
+99.5%
9% stage 1 growth, 11% discount
Bull
$139.60
+136.6%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
6.7x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $59.00 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $117.74 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