Recent Price Trend in Huron Consulting (HURN) is Your Friend, Here's Why

Mastercard Incorporated MA recently collaborated with a Senegal-based fintech firm, New Africa Technology (NAT), in a bid to launch a virtual and physical prepaid card tied to NAT's digital wallet, "Flash."

Transactions through the wallet can be done using both virtual and physical prepaid cards, and a seamless payment experience is assured. It incorporates features like invoice splitting among multiple users, expense management, and budgeting tools. The app also works seamlessly with regional wallets, allowing for smooth transactions between users.

The innovative fintech card introduced with the help of Mastercard aims to bolster merchant support by facilitating payment acceptance via innovative methods such as QR Pay, Pay by Link, and contactless transactions. Additionally, it introduces "Flash in Business," a platform tailored to meet the corporate financial needs of businesses.

The ulterior motive of Mastercard behind the latest move remains to offer secure and diversified payment solutions and therefore, revolutionize the payment systems in Senegal, Côte d'Ivoire and Benin.

The new card offering, infused with attractive features and technology advancements, is expected to attract new customers to indulge in spending to avail the benefits. Increased usage of the card may boost the tech giant’s net revenues from its global payment network by charging fees to customers based on the gross dollar volume of the cards.

Concurrent with the recent move, Worldpay introduced an innovative partnership with Mastercard to streamline supplier payouts and provide tailored solutions for travel agents. Worldpay, through the Mastercard Wholesale Programme, offers travel agents in the U.K. and Europe access to virtual cards, streamlining payment processes for clients.

Shares of Mastercard have gained 24.9% in the past year compared with the industry’s 31.8% growth. MA currently carries a Zacks Rank #3 (Hold).

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.

That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.

However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.

Our proprietary system currently recommends Huron Consulting (HURN) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.

Studies have shown that stocks with the best growth features consistently outperform the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.

While there are numerous reasons why the stock of this consulting company is a great growth pick right now, we have highlighted three of the most important factors below:

Earnings Growth

Earnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for Huron Consulting is 22.6%, investors should actually focus on the projected growth. The company's EPS is expected to grow 23% this year, crushing the industry average, which calls for EPS growth of 6.2%.

Impressive Asset Utilization Ratio

Growth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.

Right now, Huron Consulting has an S/TA ratio of 1.12, which means that the company gets $1.12 in sales for each dollar in assets. Comparing this to the industry average of 1.08, it can be said that the company is more efficient.

In addition to efficiency in generating sales, sales growth plays an important role. And Huron Consulting is well positioned from a sales growth perspective too. The company's sales are expected to grow 8.6% this year versus the industry average of 5.6%.

Promising Earnings Estimate Revisions

Beyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

There have been upward revisions in current-year earnings estimates for Huron Consulting. The Zacks Consensus Estimate for the current year has surged 2.7% over the past month.

Bottom Line

Huron Consulting has not only earned a Growth Score of B based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #2 because of the positive earnings estimate revisions.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination positions Huron Consulting well for outperformance, so growth investors may want to bet on it.

Zacks Investment Research

Have you been paying attention to shares of CRA International (CRAI)? Shares have been on the move with the stock up 10.3% over the past month. The stock hit a new 52-week high of $208.38 in the previous session. CRA International has gained 104.9% since the start of the year compared to the 24.6% move for the Zacks Business Services sector and the 20.1% return for the Zacks Consulting Services industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, CRA reported EPS of $1.77 versus consensus estimate of $1.58 while it beat the consensus revenue estimate by 0.55%.

For the current fiscal year, CRA is expected to post earnings of $7.03 per share on $676.16 million in revenues. This represents a 28.75% change in EPS on an 8.36% change in revenues. For the next fiscal year, the company is expected to earn $7.40 per share on $697.78 million in revenues. This represents a year-over-year change of 5.3% and 3.2%, respectively.

Valuation Metrics

CRA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

CRA has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 28.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 26.1X. On a trailing cash flow basis, the stock currently trades at 21.7X versus its peer group's average of 20.7X. Additionally, the stock has a PEG ratio of 1.8. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CRA currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CRA fits the bill. Thus, it seems as though CRA shares could have a bit more room to run in the near term.

How Does CRAI Stack Up to the Competition?

Shares of CRAI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Huron Consulting Group Inc. (HURN). HURN has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of F.

Earnings were strong last quarter. Huron Consulting Group Inc. beat our consensus estimate by 6.33%, and for the current fiscal year, HURN is expected to post earnings of $6.91 per share on revenue of $1.48 billion.

Shares of Huron Consulting Group Inc. have gained 21.2% over the past month, and currently trade at a forward P/E of 21.21X and a P/CF of 19.7X.

The Consulting Services industry is in the top 16% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CRAI and HURN, even beyond their own solid fundamental situation.

Zacks Investment Research