Hackett Group Inc (The). Common Stock (HCKT)

FairStock Score: 55/100 — STEADY

Key Financials

Strengths

• Generates $33 million in annual free cash flow (10.2% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 14.1% above cost of capital
• Attractive 3.5% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($5) with negative 143% margin of safety—limited downside protection
• Revenue declining at 4.4% year-over-year signals potential demand weakness or market share loss

AI Analysis

Hackett Group Inc (The). Common Stock is a micro-cap technology company valued at $325 million. The business generates $301 million in annual revenue with a 1.9% net margin and $33 million in free cash flow. From a quality standpoint, Hackett shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 2.7 in the grey zone. On valuation, the stock is trading at a premium 27.4x earnings, with trades far above its Graham Number ($5) with no margin of safety. Growth dynamics show revenue growing at -4.4% and profit growth of 56.9%. The 3.5% dividend yield adds an income component for patient holders. Our composite FairStock Score of 55/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $33 million in annual free cash flow (10.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the technology space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer