Its large employee base (roughly 1,800 consultants) allows it to compete for lengthy engagements. Also, its historical relevance (the company was founded in 1982) and industry expertise lend it a narrow economic moat, according to Morningstar.
However, sales and margins are difficult to forecast since volume is sporadic. Typical within the industry, compensation is comparatively high, crimping profit potential. Also, billing rates are difficult to adjust, so growth is contingent upon hiring. Morningstar values Navigant's stock at $16, suggesting 69% of upside. Third-quarter profit missed consensus by 26%. The stock corrected 24% on the announcement.