Harte Hanks, Inc. (NASDAQ:HHS)

Reported Q4 2023 results:

• Sales of $49.5 million vs $54.8 million in the prior year and ahead of analyst estimates of $47.0 million
• EPS of $0.50 vs $0.13 in the prior year and well ahead of analyst estiamtes of $0.12

"we are taking steps, in collaboration with the Kearney Organization, to optimize our cost structure to enable us to invest in sales and marketing without depleting our cash reserves," continued Davis. "We have identified costs we can eliminate totaling approximately $16 million over next two years with $6 million of savings expected in 2024. David Fisher, our new Chief Transformation Officer, is working closely with David Garrison, our new Chief Financial Officer, to execute these important changes."

"I believe the opportunity for Harte Hanks is significant," concluded Davis. "Our solutions meet the current and expected needs of customers, and we drive tangible value for clients and their customers. We can deliver organic growth, expanding the number of logos we work with and deepening our relationship with these customers over time. We are confident that we can streamline our organization to expand profitability and cash generation as we grow. The benefits of Project Elevate are expected to become evident in the second half of 2024 and into 2025."

Scott Weis of Semco Capital has offered a bullish pitch on Harte-Hanks, Inc. (NASDAQ:HHS) ($12.15, $88.1M market cap), a 100 year old company that is a classic big cap inside a microcap. The revenue base for this $80m market cap is >$200m.  HHS struggled for years and has historically been known as a paper and mailing company. That is not the case any more. 

He believes with modest growth and 10% EBITDA margins (that have the potential to expand another 100-400 bps) that HHS deserves a multiple of 10x EPS or 8-10x EBITDA. Both metrics put the stock >$20/share or 73% upside. 

~Scott Weis, Semco Capital

Please see the full pitch here.

(Please note that we are also adding HHS to our Select Long Disclosures Model Portfolio )