Huron Consulting (HURN) is a professional services company focused on helping clients develop sound business models, streamline operations, embrace digital transformation and navigate constant change, explains Tyler Laundon, editor of Cabot-Small Cap Confidential.

The company — a conservative Top Pick for 2023 — was founded in 2002 and came public in 2004. It is based in Chicago and has additional locations in the US, Canada, India, Singapore and Switzerland.

Huron has a market cap of around $1.5 billion and is on pace to grow revenue by nearly 20% to $1.1 billion in 2022. EPS should be up 27% to $3.31. Management plans to return 25% to 50% of free cash flow to shareholders. Looking to 2023, the current consensus is for revenue to grow 10% to $1.21 billion and EPS to grow 20% to $3.98.

As with other successful consulting firms, technology, data, analytics and people are the heart of Huron’s business. The company can’t succeed if it hasn’t hired and developed industry-specific talent required to help other organizations achieve their goals. The company ended Q3 with 4,571 revenue-generating professionals, up 23% over a year ago.

Its biggest market segments are Healthcare and Education, which represented 42% and 26% of 2021 revenue, respectively. The remaining 32% of revenue came from what Huron now calls its Commercial segment, which includes energy and utilities, financial services, industrials and manufacturing, and public sector markets.

Examples of clients include health systems, hospitals, universities, research institutions, banks, asset managers, insurance and private equity firms, oil and gas and utilities companies and the federal government.

The company has recently begun to focus more on its strength of providing digital services, such as helping customers transition to cloud-based tech and analytic solutions.

In fact, it has begun reporting revenue specifically related to Digital, and has been building out partnerships with major enterprise software companies in this area, including Oracle (ORCL), Salesforce (CRM), Workday (WDAY), Amazon (AMZN), Informatica (INFA) and SAP (SAP), among others.

Huron company serves nearly 2,000 clients around the world. Its 10 largest clients accounted for just under 20% of 2021 revenue. It’s not the sexiest stock out there. But it’s a great business. And it’s growing revenue and earnings at double-digit rates.

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