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Here's Why You Should Hold on to FTI Consulting (FCN) Stock
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FTI Consulting, Inc.’s (FCN - Free Report) shares have rallied 25.9% in the past year compared with 5.4% increase of the industry it belongs to. With revenues expected to register 2.1% and 7.3% growth in 2020 and 2021, respectively, we believe that investors should hold on to the stock.
Factors Supporting the Rally
Increased regulatory scrutiny and a proliferation of corporate litigation sustain the demand for FTI Consulting’s products.
Structural change has become a necessity 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 call for FTI Consulting’s specialized skill sets, which in turn drive the top line.
Further, the company’s international operations help expand its geographic footprint and contribute to top-line growth. The industrial and geographical diversification of its customer base (throughout the United States and internationally) helps mitigate the risk of incurring material losses.
Besides, FTI Consulting's endeavors to reward shareholders through share buybacks are impressive. In 2019, 2018 and 2017, the company had repurchased shares worth $105.9 million, $40.7 million and $168.0 million, respectively. These initiatives not only instil investors’ confidence but also make a positive impact on earnings per share.
Risks Associated
FTI Consulting’s debt level has increasrd significantly quarter over quarter. Total debt at the end of first-quarter 2020 was $492 million, up from the $452 million recorded at the end of the prior quarter. The total debt to total capital ratio of 0.25 was higher than the previous quarter’s 0.23. An increasing debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is on the rise and so is the risk of insolvency.
Further, cash and cash equivalent balance of $223 million at the end of the first quarter was well below the debt level, underscoring that the company doesn’t have enough cash to meet its debt burden.
Zacks Rank and Stocks to Consider
FTI Consulting currently carries a Zacks Rank #3 (Hold).
Long-term earnings (three to five years) growth rate for Elastic, SailPoint Technologies and DocuSign is estimated at 25.9%, 15% and 31.2%, respectively.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Here's Why You Should Hold on to FTI Consulting (FCN) Stock
FTI Consulting, Inc.’s (FCN - Free Report) shares have rallied 25.9% in the past year compared with 5.4% increase of the industry it belongs to. With revenues expected to register 2.1% and 7.3% growth in 2020 and 2021, respectively, we believe that investors should hold on to the stock.
Factors Supporting the Rally
Increased regulatory scrutiny and a proliferation of corporate litigation sustain the demand for FTI Consulting’s products.
Structural change has become a necessity 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 call for FTI Consulting’s specialized skill sets, which in turn drive the top line.
FTI Consulting, Inc. Revenue (TTM)
FTI Consulting, Inc. revenue-ttm | FTI Consulting, Inc. Quote
Further, the company’s international operations help expand its geographic footprint and contribute to top-line growth. The industrial and geographical diversification of its customer base (throughout the United States and internationally) helps mitigate the risk of incurring material losses.
Besides, FTI Consulting's endeavors to reward shareholders through share buybacks are impressive. In 2019, 2018 and 2017, the company had repurchased shares worth $105.9 million, $40.7 million and $168.0 million, respectively. These initiatives not only instil investors’ confidence but also make a positive impact on earnings per share.
Risks Associated
FTI Consulting’s debt level has increasrd significantly quarter over quarter. Total debt at the end of first-quarter 2020 was $492 million, up from the $452 million recorded at the end of the prior quarter. The total debt to total capital ratio of 0.25 was higher than the previous quarter’s 0.23. An increasing debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is on the rise and so is the risk of insolvency.
Further, cash and cash equivalent balance of $223 million at the end of the first quarter was well below the debt level, underscoring that the company doesn’t have enough cash to meet its debt burden.
Zacks Rank and Stocks to Consider
FTI Consulting currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader Zacks Business Services sector are Elastic N.V. (ESTC - Free Report) , SailPoint Technologies Holdings, Inc. and DocuSign, Inc. (DOCU - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term earnings (three to five years) growth rate for Elastic, SailPoint Technologies and DocuSign is estimated at 25.9%, 15% and 31.2%, respectively.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>