Huron Consulting Group (HURN): Is the Stock Undervalued Amid Strong Q3 Growth and Strategic Healthcare Expansion?

Huron Consulting Group (NASDAQ:HURN) has delivered a standout performance in Q3 2025, with revenue surging 16.7% year-over-year to $441.3 million and non-GAAP EPS of $2.10 exceeding analyst estimates by 12.3%, according to a IndexBox analysis. The company's healthcare segment, a key growth driver, reported record revenue of $219.5 million-a 19.9% increase-while the firm raised full-year guidance for both revenue and adjusted EPS, as noted in a SimplyWall.St report. With margin discipline intact and strategic acquisitions fueling expansion, investors are left to wonder: Is HURN undervalued in a high-demand sector poised for AI-driven transformation?

Financial Performance: Beating Estimates and Raising Guidance

Huron's Q3 results underscore its ability to capitalize on market tailwinds. Revenue growth was broad-based, driven by all three operating segments-Healthcare, Education, and Commercial. Adjusted EBITDA hit $67.44 million, surpassing estimates by 4.7%, with a margin of 15.3%, according to the IndexBox analysis. The company maintained its operating margin at 11.3%, matching the prior year's level despite inflationary pressures, as noted in a Marketscreener report.

Notably, Huron raised its full-year revenue guidance to a range of $1.65–$1.67 billion and increased adjusted EPS guidance to $7.60 at the midpoint, reflecting confidence in sustained demand for its consulting services, as highlighted in the SimplyWall.St report. CEO Mark Hussey attributed this momentum to "operational transformation needs in healthcare and the integration of digital solutions," as reported in the Yahoo Finance earnings call highlights.

Healthcare Segment: A Catalyst for Growth

The Healthcare segment's 19.9% year-over-year revenue growth was a standout, fueled by margin pressures in the sector and demand for Huron's expertise in cost optimization and digital transformation, according to the SimplyWall.St report. In November 2025, the company acquired AXIOM Systems' Payor Consulting Services Division, adding 40 team members and enhancing its healthcare offerings, as reported in a Marketscreener announcement. This acquisition not only deepened Huron's capabilities but also signaled a strategic pivot toward integrated solutions, including data modernization-a precursor to AI adoption, according to the Yahoo Finance earnings call highlights.

While the firm has not yet disclosed specific AI initiatives in healthcare, its Education segment is already leveraging AI for data analytics and predictive modeling, as noted in the Yahoo Finance earnings call highlights. This cross-sector innovation suggests Huron is positioning itself to capitalize on AI-driven efficiencies in healthcare, a sector ripe for disruption.

Margin Discipline and Strategic Acquisitions

Huron's operating margin of 11.3% in Q3 2025 remained stable, reflecting disciplined cost management, according to the IndexBox analysis. The company's adjusted EBITDA margin of 15.3% and free cash flow margin of 20.3% further highlight its profitability, as noted in the Marketscreener report. These metrics outperform many peers in the professional services sector, where margins often contract under inflationary conditions.

The AXIOM acquisition exemplifies Huron's strategy to scale through targeted M&A. By integrating specialized teams and expanding its healthcare footprint, the company is building a moat in a sector where operational complexity and regulatory demands create high barriers to entry, as reported in the Marketscreener announcement.

Valuation Considerations: Growth vs. Price

Despite its strong performance, HURN trades at a forward P/E of approximately 18x, based on its raised EPS guidance of $7.60, according to the IndexBox analysis. This valuation lags behind peers like UnitedHealth Group (UNH) and Cigna (CI), which trade at 22x and 20x, respectively, despite slower growth profiles, as noted in the SimplyWall.St report. Huron's EBITDA margin of 15.3% also compares favorably to industry averages, suggesting room for upside if AI-driven efficiencies further boost profitability, according to the Marketscreener report.

The stock's 7.4% post-earnings rally reflects optimism about its guidance, but the valuation still appears anchored to legacy metrics. With healthcare consulting demand projected to grow at 8–10% annually through 2030, Huron's strategic focus on digital transformation and AI could unlock significant value, according to the Yahoo Finance earnings call highlights.

Conclusion: A Compelling Case for Near-Term Investment

Huron Consulting Group's Q3 results demonstrate a rare combination of revenue acceleration, margin resilience, and strategic foresight. The healthcare segment's momentum, bolstered by acquisitions and digital innovation, positions the company to outperform in a sector grappling with margin pressures. While the stock's valuation remains modest relative to its growth trajectory, the integration of AI-driven solutions-already evident in the Education segment-hints at a broader transformation. For investors seeking exposure to a high-growth, high-margin player in a critical industry, HURN offers an attractive risk-reward profile.