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When FTI Consulting, Inc. (NYSE:FCN) announced its most recent earnings (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well FTI Consulting has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see FCN has performed.
How Did FCN's Recent Performance Stack Up Against Its Past?
FCN's trailing twelve-month earnings (from 31 December 2018) of US$151m has jumped 40% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 39%, indicating the rate at which FCN is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is only a result of industry tailwinds, or if FTI Consulting has experienced some company-specific growth.
In terms of returns from investment, FTI Consulting has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 7.2% exceeds the US Professional Services industry of 6.2%, indicating FTI Consulting has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for FTI Consulting’s debt level, has increased over the past 3 years from 8.7% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 69% to 20% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While FTI Consulting has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research FTI Consulting to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FCN’s future growth? Take a look at our free research report of analyst consensus for FCN’s outlook.
- Financial Health: Are FCN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.