Strategic Investment Analysis

Company Overview

FTI Consulting, Inc. (NYSE: FCN) is a leading global business advisory firm specializing in corporate finance, restructuring, forensic and litigation consulting, economic consulting, technology, and strategic communications. Founded in 1982 and headquartered in Washington, D.C., FTI Consulting serves a diverse clientele across industries such as aerospace, financial services, healthcare, energy, and technology. The company’s multidisciplinary approach helps organizations navigate complex challenges, including regulatory scrutiny, financial distress, cybersecurity threats, and reputational risks. With a market cap of $5.7B and a strong presence in key global markets, FTI Consulting is well-positioned in the growing professional services sector. Its asset-light business model and high-margin advisory services contribute to steady cash flows and resilience in economic downturns. The firm’s expertise in litigation support and restructuring further enhances its competitive edge in the consulting industry.

Investment Summary

FTI Consulting presents a compelling investment case due to its diversified service offerings, strong cash flow generation ($395M operating cash flow in FY 2023), and low leverage (total debt of $242M against $660M cash). The company’s beta of 0.18 suggests lower volatility compared to the broader market, appealing to risk-averse investors. However, its lack of dividends and reliance on discretionary corporate spending may limit upside during economic contractions. Growth is driven by increasing demand for restructuring (post-pandemic adjustments) and litigation consulting (regulatory scrutiny in tech and finance). Diluted EPS of $7.81 reflects efficient operations, but competition from larger consulting firms poses a risk to margin expansion.

Competitive Analysis

FTI Consulting differentiates itself through niche expertise in litigation support, restructuring, and forensic investigations—areas where scale and reputation are critical. Unlike generalist consultancies, FTI’s segmented approach (e.g., Economic Consulting for antitrust cases) allows deep specialization. Its Technology segment, focusing on e-discovery and cybersecurity, capitalizes on digital transformation trends. However, the firm faces stiff competition from diversified players like Accenture in tech consulting and Alvarez & Marsal in restructuring. FTI’s mid-market positioning limits its ability to compete for mega-cap clients but provides agility in serving mid-sized firms. The Strategic Communications segment competes with PR giants like Edelman, though FTI’s integration with legal and financial services offers cross-selling opportunities. The company’s asset-light model ensures scalability, but talent retention in a competitive labor market remains a challenge.

Major Competitors

• Accenture plc (ACN): Accenture dominates IT and management consulting with a $200B+ market cap and global scale. Its strengths include digital transformation services and outsourcing, but it lacks FTI’s focus on litigation and restructuring. Weaknesses include higher exposure to cyclical tech spending.
• Booz Allen Hamilton Holding Corporation (BAH): Booz Allen specializes in government and defense consulting, overlapping with FTI’s public sector work. Its security clearance advantages are offset by limited corporate restructuring capabilities. Strong in cybersecurity but less diversified than FTI.
• Aon plc (AON): Aon’s risk advisory and reinsurance services compete with FTI’s forensic consulting. Larger revenue base ($13B) but more focused on insurance markets. Weaknesses include lower growth in litigation support compared to FTI.
• Alvarez & Marsal (Private): A leading private restructuring firm, Alvarez & Marsal rivals FTI’s Corporate Finance segment. Known for turnaround management, but lacks FTI’s public company resources and technology consulting arm. Strong in Europe and Asia.