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Reasons to Retain FTI Consulting (FCN) in Your Portfolio

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FTI Consulting, Inc.’s (FCN - Free Report) shares have appreciated 23.6% year to date, outperforming the 20% rally of the industry it belongs to and 16.4% rise of the Zacks S&P 500 composite.

The company’s earnings for 2021 and 2022 are expected to grow 3% and 17.9% year over year, respectively.

Factors That Auger Well

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 helping  FTI Consulting generate continued revenue growth from the existing international operations.

FTI Consulting’s international operations help expand its geographic footprint and contribute to top-line growth. 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.

Debt Woes Stay

FTI Consulting’s total-debt-to-total capital ratio was 0.25 at the end of first-quarter 2021, higher than the previous quarter’s 0.17. Increasing debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets has increased, and so has the risk of insolvency.

Further, cash and cash equivalent balance of $233 million at the end of the quarter was far below the long-term debt of $459 million, underscoring that the company doesn’t have enough cash to meet this debt burden.

Zacks Rank and Stocks to Consider

FTI Consulting currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are The Interpublic Group (IPG - Free Report) , Cross Country Healthcare (CCRN - Free Report) and Paychex (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The long-term expected earnings per share (three to five years) growth rate for Interpublic, Cross Country Healthcare and Paychexis pegged at 10.2%, 10.5% and 8%, respectively.

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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

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