FTI Consulting (FCN) Gains From Global Business, Debt Woes Ail

FTI Consulting, Inc.’s FCN is currently benefiting from service diversification and geographic expansion.

The company recently delivered second-quarter 2021 adjusted earnings per share of $1.74 that surpassed the Zacks Consensus Estimate by 20.8% and increased 31.8% on a year-over-year basis.
Total revenues of $711.5 million beat the consensus mark by 10.4% and increased 17% on a year-over-year basis.

FTI Consulting’s shares have gained 31.6% over the past six months, outperforming the 30.7% growth of the industry it belongs to.

FTI Consulting, Inc. Price and Consensus

FTI Consulting, Inc. price-consensus-chart | FTI Consulting, Inc. Quote

How is FTI Consulting Doing?

FTI Consulting’s potential to club diverse issues like damage assessment, accounting, economics, statistics, finance and industry under a single platform looks impressive. The company continues to pursue opportunities in areas such as business transformation services, transaction advisory business, restructuring, retail, construction, data and analytics, cyber business, information governance, and international arbitration. This makes it an excellent partner for global clients dealing with international arbitration issues, thereby generating continued revenue growth from its existing international operations.

In 2020, the company earned almost 37% of its revenues from its international businesses. The industrial and geographical diversification of its customer base, throughout the United States and internationally, helps mitigate the risk of incurring material losses.

Meanwhile, FTI Consulting’s cash and cash equivalent balance of $257 million at the end of the second quarter was far below the long-term debt of $392 million, underscoring that the company does not have enough cash to meet this debt burden. The company's current ratio (a measure of liquidity) was at 2.16 at the end of the second quarter, lower than the previous quarter’s 2.32.

Zacks Rank and Stocks to Consider

Fiserv currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Zacks Business Services sector are ManpowerGroup MAN, Equifax EFX and TransUnion TRU, each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Equifax and TransUnion is 23.1%, 15.2% and 22%, respectively.

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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.