Smooth Sailing for Navigant Consulting (NCI) Stock with a 45% Upside

NEW YORK (TheStreet) -- Navigant Consulting  (NCI) broke out to the upside last week with volume surging and the On-Balance-Volume (OBV) line confirming the rally, chart below.

Prices found support in the $14 to $12 area the past year. The longer-term picture is below.

With the slope of the 40-week (200-day) moving average positive and the Moving Average Convergence Divergence oscillator above the zero line, we want to go with this upside breakout.

There is resistance in the $18-$20 area on the chart above, but the time NCI was in that area is not as long as the time spent in the support zone.

Like water, NCI should take the path of least resistance, and right now that appears to be on the upside. A breakout over the resistance should open up price targets in the mid-$20s.

Separately, TheStreet Ratings team rates NAVIGANT CONSULTING INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate NAVIGANT CONSULTING INC (NCI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, solid stock price performance, compelling growth in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins.

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

  • The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 12.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NCI's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, NCI has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 110.3% when compared to the same quarter one year prior, rising from -$75.86 million to $7.83 million.
  • You can view the full analysis from the report here: NCI

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