A prudent investment decision involves buying well-performing stocks at the right time, while selling those that are at risk. A rise in share price and strong fundamentals signal a stock's bullish run.
FTI Consulting, Inc. FCN is a consulting services stock that has performed well so far this year and has the potential to sustain the momentum in the near term. Consequently, if you haven't 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 returned 73.5% year-to-date, significantly outperforming the 16% rise of the industry it belongs to.
Solid Zacks Rank: FTI Consulting currently carries a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank #1 or 2 (Buy) offer attractive investment opportunities for investors. 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. Over the past 60 days, the Zacks Consensus Estimate for current quarter earnings has increased 9.6%. For 2018 and 2019, the estimates have moved up 23.4% and 15.6%, respectively.
Positive Earnings Surprise History: FTI Consulting has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, delivering an average positive earnings surprise of 58.3%.
Strong Growth Prospects: The Zacks Consensus Estimate for 2018 earnings is pegged at $3.27, indicating year-over-year growth of 40.9%. Moreover, earnings are expected to register 2.1% growth in 2019.
Growth Factors: FTI Consulting looks strong on the back of its ability to club diverse issues like damage assessment, accounting, economics, statistics, finance and industry under one umbrella. The company continues to pursue opportunities in areas like business transformation services, transaction advisory business, restructuring, retail, construction, data and analytics, cyber business, information governance, and international arbitration.
Additionally, increased regulatory scrutiny and rise in corporate litigation are likely to drive demand for FTI Consulting's products. The company is a preferred partner of global clients dealing with international arbitration issues, which ensures consistent revenue growth from existing international operations. In second-quarter 2018, the company witnessed double-digit revenue growth across each of its regions of operation - North America, Asia-Pacific, Europe, Middle East and Africa (EMEA) and the United Kingdom. This implies that FTI Consulting's international expansion remains strong and will likely continue in the future.
Lower tax rates (as a result of Tax Cuts and Jobs Act) have been contributing to FTI Consulting's bottom line. The company enjoyed a lower effective tax rate of 24.4% in second-quarter 2018 compared with 37.8% in the year-ago quarter. Additionally, FTI Consulting raised its full-year 2018 earnings per share guidance to the range of $2.90-$3.30 from $2.35-$2.65 expected earlier. Effective tax rate is expected to be between 27% and 29% for the remainder of 2018 compared with 28% to 31% expected previously. Higher profits will open up more growth opportunities for the company and enable it to return capital to shareholders.
Other Stocks to Consider
A few other top-ranked stocks in the broader Business Services sector include CRA International CRAI , NV5 Global NVEE and Information Services Group III . While CRA International holds a Zacks Rank #1, NV5 Global and Information Services Group carry a Zacks Rank #2 (Buy).
CRA International, NV5 Global and Information Services Group have delivered an average four-quarter positive earnings surprise of 38.6%, 12.7% and 5.5%, respectively.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Information Services Group, Inc. (III): Free Stock Analysis Report FTI Consulting, Inc. (FCN): Free Stock Analysis Report NV5 Global, Inc. (NVEE): Free Stock Analysis Report CRA International,Inc. (CRAI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research