$60.00
$216.00
bear $60.00
base $131.00
bull $216.00
margin of safety $80.00
market price* $174.86
Huron Consulting Group is a professional-services firm that sells consulting, managed services and technology implementation to three client groups. In 2025 Healthcare (hospitals and health systems) was 50% of revenue before reimbursable expenses, Education (colleges and research universities) 30%, and Commercial (financial services, energy and utilities, and other companies) 20%. It served more than 2,000 clients, and the ten largest made up about 19% of revenue. The work splits into Consulting and Managed Services ($977 million in 2025, up 13.1%) and Digital, which covers implementing systems such as enterprise resource planning and customer relationship management software ($686 million, up 10.2%). The firm earns money from the hours of its billable professionals, so the drivers are headcount, utilization and billing rates. Utilization rose in 2025 to 75.7% in Consulting and 78.2% in Digital. How we measured earnings. We start from operating cash flow, strip out swings in receivables, unbilled work and accrued pay, subtract stock-based pay as a real cost, subtract the capital spending needed to maintain the business (including capitalized software), and subtract office rent. Rent has to be subtracted separately here because the lease accounting otherwise lets it slip out. On that basis, earnings for shareholders were $2.50 per share in 2021, $3.64 in 2022, $4.30 in 2023, $6.30 in 2024 and $7.91 in 2025, on revenue that grew from $927 million to $1.70 billion. The 2024 figure includes a one-time litigation settlement of about $11 million after tax, which Huron received as the plaintiff, so the clean figure is about $5.70. The 2017 and 2020 results included large goodwill write-downs. Those are non-cash and don't affect this measure, but they do show that the firm has overpaid for acquisitions before. We value the business as it has existed since its portfolio reshaping of 2021-2024 (the Life Sciences sale, the 2022 segment realignment and the Studer Education sale at the end of 2024). We anchor on the middle of the last three clean years, about $5.70 per share. That is deliberately below 2025's $7.91. We use a median rather than the latest year so the value doesn't simply follow the best year. Two costs that the headline cash flow hides are charged against growth in every case. First, a growing consulting firm has to finance its receivables and unbilled work. Over the past decade roughly 15-20 cents of working capital went in for each dollar of added revenue, so we deduct 20% of assumed organic revenue growth each year. Second, recent growth was partly bought: $86 million of 2025's revenue gain came from acquisitions such as AXIA Consulting, Treliant and AXIOM, costing $111.6 million of cash in 2025 and $49.5 million in 2024. The amortization of acquired client relationships ($11.3 million in 2025) is added back in our earnings measure, so none of the cases assumes growth from future acquisitions. Only organic growth is modeled, and that growth pays for its own working capital. Base case, $131 per share. Year one assumes earnings about 15% above the anchor, or $6.56 before working capital. That is below the 25.6% per-share growth actually achieved in 2025, and it is supported by facts already reported: 7.1% organic growth in 2025, a full year of the 2025 acquisitions, and first-quarter 2026 revenue up 11.8% on the prior year. After that, per-share earnings grow 8% a year through year five, from about 6% organic growth plus the steady share-count reduction the company has shown (diluted shares fell from 21.8 million in 2021 to 17.4 million in early 2026). Growth then slows to 6% through year ten. Beyond year ten, earnings are held flat for twenty years and then given no further value. The support for that is the firm's 20-plus-year record of serving the same hospital and university markets. We give no credit for growth beyond year ten because nothing structural guarantees it. Bear case, $60 per share. This is built from risks the company itself discloses. Demand for Digital work in Healthcare already fell in 2025. Hospital budgets are exposed to changes in Medicare and Medicaid payments, and university budgets to changes in federal research-grant cost rates and grant spending, both named in the annual report. Huron has also lost earnings in a downturn before: earnings per share fell about 20% in 2020 and stayed there in 2021. In this case year-one earnings drop 15% below the anchor, about 39% below 2025. They then recover only 2-3% a year, and after year ten they shrink 5% a year for fifteen years as a people business with no hard assets loses ground. Debt raises the stakes. Bank borrowings were $511 million at the end of 2025 (1.93 times the covenant leverage measure), up from $358 million, and the company borrowed further in early 2026 to fund $153 million of first-quarter buybacks. In a downturn that debt would crowd out the buybacks the base case relies on. Bull case, $216 per share. The 2025 earnings level of $7.91 holds as the starting point, meaning the higher utilization and the acquired businesses are kept. Per-share earnings then grow 11% a year for five years (about 9% organic growth, near the revenue pace of 2023-2025, plus buybacks) and 8% through year ten, followed by 2% growth for ten years and then flat. Every year still pays the working-capital cost of that faster growth. All cases are discounted at 6%. Debt is not subtracted separately because the cash-flow measure is already after interest; its risk sits in the bear case. The main thing that could make this valuation wrong is if the 2024-2025 jump in margins and utilization turns out to be a peak rather than a new level. Watch Healthcare Digital demand and university spending under federal funding pressure. We could not find a single figure in the filings for the net working capital that each dollar of growth requires, so the 20% rate is our estimate from the past decade's cash flows. The value of Huron's preferred-stock and convertible-debt investment in an international-student-recruitment company, which took a $10.4 million impairment in 2025, is not included in any case. The margin-of-safety price is $80 a share, about 39% below the base value and a little above the bear value. We estimate a margin of that size is warranted for a cyclical, people-driven services business that carries a growing amount of debt.