FTI Consulting Inc. FCN had an impressive run over the year-to-date period. The stock has gained 13% compared with the 9.9% rally of its industry.
FCN reported impressive second-quarter 2024 results. Quarterly earnings per share of $2.34 surpassed the Zacks Consensus Estimate by 19.4% and increased 33.7% year over year. Total revenues of $949.2 million beat the consensus mark by 2.1% and increased 9.8% from the year-ago quarter.
How is FTI Consulting Doing?
FCN’s top line is aided by its diversified offerings and international operations. The company earned almost 37% of its revenues from its international businesses in 2023. Also, FCN’s five reportable segments offer a diversified portfolio of practices providing services across four geographic regions.
The broad range of practices and services, diversified revenue streams, specialized industry expertise, and global reach sets FTI Consulting apart from its competitors. FCN can mitigate the effects of economic cycles, crises, events and changes in a particular practice, industry or country on the back of diversification.
We expect an increase in regulatory scrutiny and a proliferation of corporate litigation to boost the demand for FTI Consulting’s products. Additionally, structural change has become necessary in the rapidly evolving global markets as management teams look to fend off rivals, protect intellectual property rights and transform businesses via M&A, divestiture and other restructuring activities. These developments demand FTI Consulting’s specialized skill sets and are anticipated to boost its top line.
FCN’s current ratio (a measure of liquidity) stood at 2.20 at the end of the second quarter of 2024, lower than the prior quarter's 2.46. Although the company has witnessed a decline in its current ratio, it does not take away from the fact that a current ratio of more than 1 indicates that the company will easily pay off its short-term obligations.
We are impressed by FTI Consulting's endeavors to reward shareholders through share buybacks. In 2023, the company repurchased shares worth $21 million. In 2022, the same amounted to $85.4 million and it amounted to $46.1 million in 2021. Apart from boosting investor confidence, these actions positively impact the bottom.
FTI Consulting has witnessed a rise in operating expenses across the past few years, which negatively impacts the bottom line. In 2023, the metric increased 14.2% year over year and the same rose 10.6% in 2022. Growing operating expenses result from a rise in selling, general, and administrative expenses (SG&A) due to higher non-billable compensation expenses, including an increase in non-billable headcount, rising bad debt, outside services, and other general and administrative expenses.
FTI Consulting, Inc. Total Expenses (TTM)
FTI Consulting, Inc. total-expenses-ttm | FTI Consulting, Inc. Quote
Zacks Rank & Stocks to Consider
FCN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Evertec EVTC and HNI HNI.
Evertec sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
EVTC has a long-term earnings growth expectation of 8%. It delivered a trailing four-quarter earnings surprise of 11.1%, on average.
HNI flaunts a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 12%.
HNI delivered a trailing four-quarter earnings surprise of 51.3%, on average.
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FTI Consulting, Inc. (FCN) : Free Stock Analysis Report
Evertec, Inc. (EVTC) : Free Stock Analysis Report
HNI Corporation (HNI) : Free Stock Analysis Report
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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 Nasdaq, Inc.
