Shares of FTI Consulting, Inc. FCN hit a 52-week high of $63.57 on May 30, before closing a tad lower at $63.07.
The company’s shares have charted a solid trajectory in recent times, appreciating over 46.8% year to date, ahead of the industry’s gain of 2.6%. Notably, the company has witnessed an 11.3% rise in share price since it posted encouraging first-quarter 2018 results.
Let’s find out what’s supporting the rally.
Earnings & Revenues Beat Estimates, Rise Y/Y
FTI Consulting reported impressive first-quarter 2018 results, wherein both earnings and revenues exceeded the Zacks Consensus Estimate. Adjusted earnings of $1.04 per share were up significantly from 34 cents in the year-ago quarter. Revenues of $497.8 million increased 11.5% year over year.
The company’s ability to club diverse issues like damage assessment, accounting, economics, statistics, finance and industry under a single platform, helps it to adapt to changing market conditions. This tailwind coupled with operational efficiency and the U.S. tax reform is having a positive impact on its bottom line.
FTI Consulting, Inc. Net Income (TTM)
Impressive Guidance
FTI Consulting reaffirmed its upbeat guidance for 2018. The company expects revenues to be in the range of $1.825-$1.875 billion, up 2.2% at mid-point. It anticipates current-year earnings between $2.35 and $2.65, up 7.8% at mid-point.
Strong Global Footprint & Competitive Position
From management’s comments on the first-quarter 2018 call, it is quite clear that the company has a fair amount of visibility regarding where it is heading and this is very important from an investment perspective.
FTI Consulting has strong global footprint, client relations and staff utilization capacity. These strengthen its competitive position in the market and position it well for future growth.
Strong Cash Generation
The company’s strong free cash flow allows it to boost shareholder value through share buybacks, debt reduction and acquisitions, and pursue growth in new areas of its business such as information governance and privacy and security, and Ringtail software licensing business.
Zacks Rank & Other Stocks to Consider
FTI Consulting currently sports a Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks in the broader Business Services sector include Automatic Data Processing ADP, Accenture plc ACN and Broadridge Financial Solutions Inc. BR, each carrying a Zacks Rank #2 (Buy).
The long-term expected earnings per share growth rate for Automatic Data Processing, Accenture and Broadridge is 11%, 10% and 10%, respectively.
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