Monday, May 13, 2024
Harte Hanks (NASDAQ: HHS) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract, and engage their customers. Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony, and IBM among others. Headquartered in Chelmsford, Massachusetts , Harte Hanks has over 2,500 employees in offices across the Americas, Europe and Asia Pacific .
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Revenues trending better than expected. The first quarter revenue “beat” indicates favorable revenue trends at the company, which appears likely to swing toward positive revenue growth in the next few quarters. Revenues are moderating at a fast clip, from down 12.6% in Q3 2023, to down 9.6% in Q4 2023 to down a modest 3.5% in Q1 (which beat our down 4.5% estimate). Q2 revenues are expected to decline a modest 0.5%.
Margins expected to improve. As the company reimagines its business, we expect that cost cutting actions should substantially improve margins in coming quarters. We expect adj. EBITDA margins to increase to the low double digits. As such, we are raising our Q3 and Q4 adj. EBITDA estimates by 32% and 26%, respectively.
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