On Sep 22, 2016, Zacks Investment Research upgraded FTI Consulting, Inc. (FCN - Analyst Report) to a Zacks Rank #3 (Hold).
Founded in 1982, FTI Consulting is based in Baltimore, MD. It provides specialized consulting services across 26 foreign countries with a total headcount of more than 4,200 employees. The company has a team of highly qualified professionals, who provide problem-solving and technology services primarily to major corporations, financial institutions and law firms. The company's client list comprises a large percentage of the Fortune 500 companies, the FTSE 100 companies, as well as the majority of the largest 25 banks and the top 100 law firms in the world. The company’s five main business segments include Corporate Finance and Restructuring, Forensic and Litigation Consulting, Strategic Communications, Technology, and Economic Consulting.
The company remains focused on expanding its business organically as well as inorganically. On Sep15, 2016, the company expanded its Houston Energy practice, which is part of its Economic Consulting segment, by appointing Rick Porter as the Senior Managing Director to be based in Houston. In addition, it has also recently upgraded its visual analytics software platform, Radiance. This updated system is fully integrated with features that will facilitate partition visualization, social networking, similarity searching, enhanced data filtering and finding indebt reports. Such improvements in technology will augment the company’s top-line growth, going forward. Acquisitions on a global basis in high-growth segments and significant investments in technology could turn around the company’s fortunes.
Internationally, FTI Consulting’s unique capabilities of bringing together damage assessment, accounting, economics, statistics, finance and industry make it an excellent partner for global clients dealing with international arbitration issues, thereby leading to continued revenue growth in the existing international operations. FTI Consulting’s international expansion remains strong and will likely continue in the future as well.
However, despite improving corporate earnings and a strong liquidity, clients’ spending patterns remained cautious, given the concerns over the current market environment, volatile financial markets and a lack of visibility regarding the impact of future tax and regulatory policies. The changes in capital markets, legal or regulatory requirements and general economic factors could hamper demand for services, thereby affecting the company’s profitability.
The company is also highly exposed to foreign exchange rate risks. Any unfavorable movement in foreign currency exchange rates might adversely influence its top line, thereby affecting its long-term growth. The revamped market dynamics from the Brexit referendum are expected to affect its trade relationship with the U.K. The company is likely to be stifled by the renegotiated deals and restrictions imposed on trade with other European Union members. Brexit could further result in higher tariff and non-tariff barriers to trade between the U.K. and the European Union, lowering the productivity of the company. Certain parts of the business have been experiencing sustained weak demand and pricing pressure. Moreover, the company has multi-year business plans which include significant investments in its technology business. These investments may hurt the bottom line in the coming quarters.
FTI Consulting currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include CRA International Inc. (CRAI - Analyst Report) , CBIZ, Inc. (CBZ - Snapshot Report) and Navigant Consulting Inc. (NCI - Analyst Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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