FTI Consulting, Inc. FCN has performed well so far this year and has the potential to sustain the momentum in the near term as well. Consequently, if you have not taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes it an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse on a year-to-date basis. Shares of FTI Consulting have gained 61.2% in the said period, outperforming the 28.1% rally of the industry it belongs to.
Solid Rank & VGM Score: The consulting services stock currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. The Zacks Consensus Estimate for third-quarter 2019 earnings has increased 10.8% over the past 60 days. Earnings estimates for 2019 and 2020 have moved up 23.5% and 7.3%, respectively, over the same time period.
Positive Earnings Surprise History: FTI Consulting has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all the preceding four quarters, with the average earnings surprise being 70.8%.
Strong Growth Prospects: The Zacks Consensus Estimate for third-quarter 2019 earnings is pegged at $1.03, indicating growth of 3% from the year-ago reported figure. Moreover, earnings in 2019 and 2020 are expected to register 35.5% and 2.5% growth, respectively, from the year-ago reported figures.
Growth Factors: FTI Consulting’s potential to club diverse issues like damage assessment, accounting, economics, statistics, finance and industry under a single platform looks impressive. Further, the company continues to pursue opportunities in areas such as business transformation services, transaction advisory business, restructuring, retail, construction, data and analytics, cyber business, information governance and international arbitration. This makes it an excellent partner for global clients dealing with international arbitration issues, thereby generating continued revenue growth from the existing international operations.
The company’s international operations are likely to help expand its geographic footprint and contribute to top-line growth. In 2018, FTI Consulting earned almost 32% of its revenues from its international businesses. The industrial and geographical diversification of its customer base (throughout the United States and internationally) helps mitigate the risk of incurring material losses. The company has a solid international presence, which is likely to be strengthened further.
Additionally, the company has been consistently rewarding shareholders though share buybacks. In the first half of 2019, FTI Consulting repurchased 908 million shares for $70.9 million. In 2018, the company had repurchased shares worth $40.7 million. Such moves indicate FTI Consulting’s commitment to create value for shareholders and underline its confidence in its business.
Other Stocks to Consider
Some top-ranked stocks in the broader Zacks Business Services sector are Huron Consulting HURN, Charles River Associates CRAI and Fiserv FISV. While Fiserv sports a Zacks Rank #1, Huron Consulting and Charles River Associates carry a Zacks Rank #2 (Buy).
Long-term expected earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is 13.5%, 13% and 12%, respectively.
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