Examining The Hackett Group, Inc.’s (NASDAQ:HCKT) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess HCKT’s latest performance announced on 28 December 2018 and compare these figures to its longer term trend and industry movements.
How HCKT fared against its long-term earnings performance and its industry
HCKT’s trailing twelve-month earnings (from 28 December 2018) of US$27m has increased by 7.1% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 29%, indicating the rate at which HCKT is growing has slowed down. What could be happening here? Well, let’s look at what’s occurring with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Hackett Group has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15% exceeds the US IT industry of 5.8%, indicating Hackett Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hackett Group’s debt level, has increased over the past 3 years from 21% to 27%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 21% to 5.3% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Hackett Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Hackett Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HCKT’s future growth? Take a look at our free research report of analyst consensus for HCKT’s outlook.
- Financial Health: Are HCKT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 28 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.