Fti Consulting, Inc (NYSE: FCN)

Sector: Industrials Industry: Consulting Services CIK: 0000887936
Market Cap 5.36 Bn
P/B 3.06
P/E 20.13
P/S 1.45
ROIC (Qtr) 10.18
Div Yield % 0.00
Rev 1y % (Qtr) 3.26
Total Debt (Qtr) 735.99 Mn
Debt/Equity (Qtr) 0.42
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About

FTI Consulting, Inc. (FCN) is a global business advisory firm operating in the industry of organizational management, risk mitigation, and dispute resolution. The company's services span across five reportable segments: Corporate Finance & Restructuring, Forensic and Litigation Consulting, Economic Consulting, Technology, and Strategic Communications. In its main business activities, FTI Consulting assists organizations in managing change, mitigating risks, and resolving disputes. It achieves this by offering a diverse range of services, including...

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Investment thesis

Bull case

  • Strong tangible asset base of 2.23B provides 3.04x coverage of total debt 735.99M, indicating robust asset backing and low credit risk.
  • Tangible assets of 2.23B provide exceptional 36.94x coverage of deferred revenue 60.48M, showing strong service capability backing.
  • Robust tangible asset base of 2.23B provides 3.24x coverage of working capital 689.54M, indicating strong operational backing.
  • Retained earnings of 1.88B provide full 2.56x coverage of long-term debt 735.99M, indicating strong internal capital position.
  • Cash reserves of 145.97M provide solid 1.08x coverage of other non-current liabilities 134.63M, indicating strong liquidity.

Bear case

  • Operating cash flow of 107.69M barely covers its investment activities of (63.82M), with a coverage ratio of -1.69, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of 107.69M shows concerning coverage of stock compensation expenses of 39.16M, with a 2.75 ratio indicating potential earnings quality issues.
  • Operating cash flow of 107.69M provides minimal 1.38x coverage of tax expenses of 78.01M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • High depreciation of 49.21M relative to operating cash flow of 107.69M, which is 0.46x suggests significant maintenance capital requirements affecting free cash flow.
  • Operating cash flow of 107.69M is outpaced by equity issuance of (779.44M) (-0.14 ratio), indicating concerning reliance on equity markets for funding operations.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Consulting Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VRSK Verisk Analytics, Inc. 28.99 Bn 59.50 10.85 4.89 Bn
2 EFX Equifax Inc 23.01 Bn 48.18 7.65 4.81 Bn
3 BAH Booz Allen Hamilton Holding Corp 9.48 Bn 11.30 0.83 4.14 Bn
4 FCN Fti Consulting, Inc 5.36 Bn 20.13 1.45 0.74 Bn
5 HURN Huron Consulting Group Inc. 2.29 Bn 21.14 1.38 0.65 Bn
6 ICFI ICF International, Inc. 1.43 Bn 22.60 0.96 0.62 Bn
7 CRAI Cra International, Inc. 1.10 Bn 25.41 1.63 0.19 Bn
8 SBC SBC Medical Group Holdings Inc 0.48 Bn 11.17 2.71 0.03 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.69 1.96
EV to Cash from Ops. EV/CFO 54.69 5.36
EV to Debt EV to Debt 8.00 58.47
EV to EBIT EV/EBIT 16.42 18.59
EV to EBITDA EV/EBITDA 14.81 20.71
EV to Free Cash Flow [EV/FCF] EV/FCF 134.25 11.61
EV to Market Cap EV to Market Cap 1.10 -835.88
EV to Revenue EV/Rev 1.59 5.73
Price to Book Value [P/B] P/B 3.06 3.44
Price to Earnings [P/E] P/E 20.13 22.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.70
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.40
Interest Coverage Int. cover (Qtr) 24.61 92.47
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -128.06 -330.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -62.22 126.66
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -13.35 -18.91
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -13.06 -12.32
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.26 -132.53
EBT Growth (1y) % EBT 1y % (Qtr) -12.68 -937.51
EPS Growth (1y) % EPS 1y % (Qtr) -10.56 -76.24
FCF Growth (1y) % FCF 1y % (Qtr) -89.91 -11.33
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.51 12.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.06 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.18 2.02
Current Ratio Curr Ratio (Qtr) 1.85 4.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.42 0.55
Interest Cover Ratio Int Coverage (Qtr) 24.61 92.47
Times Interest Earned Times Interest Earned (Qtr) 24.61 92.47
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.00 -16.97
EBIT Margin % EBIT Margin % (Qtr) 9.71 -96.24
EBT Margin % EBT Margin % (Qtr) 9.32 -22.60
Gross Margin % Gross Margin % (Qtr) 31.90 54.26
Net Profit Margin % Net Margin % (Qtr) 7.20 -25.32