How Will FTI Consulting (FCN) Stock Be Affected Today by This Analyst Action?

NEW YORK (TheStreet) -- Shares of FTI Consulting Inc. (FCN) are up today 1.48% to $36.39 after the company was upgraded to "outperform" from "market perform" by William Blair & Co.

William Blair said it raised the business advisory firm's rating because management is making solid progress on turning the business around.

The company has a price target of $39 on th eshares.. 

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TheStreet Ratings team rates FTI CONSULTING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate FTI CONSULTING INC (FCN) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.1%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, FCN has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • FTI CONSULTING INC's earnings per share declined by 27.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FTI CONSULTING INC continued to lose money by earning -$0.31 versus -$0.99 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus -$0.31).
  • The change in net income from the same quarter one year ago has exceeded that of the Professional Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 26.6% when compared to the same quarter one year ago, falling from $23.49 million to $17.25 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Professional Services industry and the overall market, FTI CONSULTING INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: FCN Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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