Navigant Consulting Inc. (NCI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Navigant made a strong comeback this season after missing earnings estimates for two successive quarters with adjusted earnings beating the Zacks Consensus Estimate by $0.05. The impressive earnings growth was attributable to strong revenues coupled with successful cost control initiatives. Going forward, the company's strategy of inorganic expansion is likely to propel its growth momentum. Navigant is also restructuring its business in order to better align the capacity with demand and aims to diligently reduce its operating expenses to improve profitability. However, stiff competition, currency fluctuations, and regulatory stringencies are likely to peg back its profitability to some extent. We maintain our long-term Neutral recommendation for the stock as we anticipate it to perform in line with the broader market.

Overview:

Founded in 1983 and headquartered in Chicago, Illinois, Navigant Consulting Inc. is a provider of specialized consulting services. The company's staff of seasoned consultants and industry leaders provides litigation support and investigative services, claims management and analysis, corporate finance services, discovery services, government contracting services as well as operations advisory and management process outsourcing services. Navigant Consulting primarily focuses on customers in industries undergoing substantial regulatory and structural changes, including construction, energy, financial services and healthcare. The company went public in 2006.

Navigant derives majority of its revenue before reimbursement from professional service fees. The company operates through four segments. In second-quarter 2012, Navigant modified its business segments to Disputes, Investigations & Economics, Financial, Risk & Compliance Advisory, Healthcare and Energy. Its previous segments were Business Consulting services, Dispute and Investigative Services, Economic Consulting and International Consulting.

The Disputes, Investigations & Economics segment provides a wide range of services related to accounting, financial and economic analysis, as well as discovery support, data management, analytics and regulatory compliance. Its clientele consists of law firms, accounting firms, corporate boards and government agencies.

The Financial, Risk & Compliance Advisory segment provides strategic, operational, valuation, risk management, investigative and compliance consulting services to clients. The clients are principally from the highly regulated financial services industry, including major financial and insurance institutions. This segment also provides anti-corruption and restructuring consulting to clients.

The Healthcare segment provides strategic, operational, management and financial advisory services to health systems, physician practice groups, payers and life sciences companies.

The Energy segment provides existing and prospective owners of energy supply and delivery assets with the ability to evaluate and enhance their entities. Its clientele consists of utilities, independent power producers, financial entities, law firms, regulators, and energy equipment providers.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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