FTI Consulting Up 10.4% In 3 Months: What's Driving It?
Zacks Investment Research | Apr 04, 2018 05:47AM ET
FTI Consulting, Inc. (NYSE:FCN) has been investors’ favorite for quite some time as evident from its price momentum. The stock has soared 10.4% in the past three months, against its industry ’s decline of 5.1%.
Strong International Business & CDG Acquisition are Key Growth Drivers
The company’s ability to bring together damage assessment, accounting, economics, statistics and finance industries under a single umbrella makes it an excellent partner for global clients dealing with international arbitration issues. Further, FTI Consulting continues to pursue opportunities in other areas like — business transformation services, transaction advisory business, retail, construction, data and analytics, cyber business, information governance and international arbitration.
This, in turn, leads to continued revenue growth. We believe FTI Consulting’s international expansion remains strong and is likely to continue in the future as well.
Increased regulatory scrutiny and a proliferation of corporate litigation are also likely to raise the demand for the company’s products. Additionally, 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 and are likely to boost its revenues.
FTI Consulting, Inc. Revenue (TTM)
Furthermore, expected gains from CDG group’s acquisition might have lifted the company’s stock price in recent times. The stock has soared a massive 44.9% since Jul, 6, 2017, the date of the announcement of the acquisition, compared with the industry ’s gain of 16.4%.
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The buyout is expected to significantly augment the company-side and interim management capabilities within FTI Consulting’s restructuring business in North America. On fourth-quarter 2017 earnings call, management stated that the buyout has already started to contribute.
In light of these positives, investors are likely to be optimistic on the stock and the share price is anticipated to surge further.
Upward Estimate Revisions & Expected Earnings Growth
The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the last 60 days, the Zacks Consensus Estimate for first-quarter earnings increased 18.2% to 65 cents per share. For 2018, the consensus mark climbed 14% to $2.53 per share in the same time frame.
Earnings growth is of utmost importance for determining a stock’s potential as surging profit levels often indicate solid prospects (and stock price gains). In this regard, the company’s expected earnings growth rates for first-quarter and 2018 are 91.2% and 9.1%, respectively.
Solid Rank & VGM Score
The upward estimate revisions, strong earnings expectations along with bullish Zacks Rank #1 (Strong Buy) reflect optimism on FTI Consulting’s prospects. You can see
Additionally, the stock’s VGM Score of B highlights its short-term attractiveness. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities for investors.
Positive Earnings Surprise History
FTI Consulting has a descent earnings surprise history. The company’s earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 6.1%.
Other Stocks to Consider
Some other top-ranked stocks in the same spaceinclude CRA International (NASDAQ:CRAI) , NV5 Global (NASDAQ:NVEE) and CynergisTek (NYSE:CTEK) . While CRA International and NV5 Global sport a Zacks Rank #1, CynergisTek carries Zacks Rank #2.
In the trailing four quarters, CRA International, NV5 Globaland CynergisTek have delivered a positive earnings surprise of 28%, 5.8% and 65.8%, respectively.
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