Harte Hanks (HHS) – Trends Appear Favorable

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Tuesday, January 24, 2023

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, 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.

Q4 Preview. Fundamentals at the company appear favorable and Q4 revenue and adj. EBITDA estimates appear to be on target. We are adjusting our EPS estimate to reflect the repurchase of its convertible preferred shares with Wipro. The agreement was for liquidation value at $9.9 million, plus 100,000 HHS shares. Due to an accounting treatment, the company is expected to report a non cash $1.6 million loss on the repurchase. We are adjusting our Q4 EPS from $0.34 to $0.12 to reflect this charge. 

Q1 Outlook. The company’s first quarter revenue mix is expected to skew toward lower margin revenue business, plus the company is expected to spend more heavily on technology investments and for the integration of a recent acquisition, InsideOut. Q1 revenues are expected to increase year over year, but Adj. EBITDA is expected to be lower. 

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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 


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