FTI Consulting, Inc. (FCN) Stock

Understand FTI Consulting, Inc.: how it makes money

FTI Consulting helps corporations navigate M&A deals, litigation disputes, regulatory investigations, and business turnarounds, billing clients on an hourly and project basis. Revenue is anchored by Corporate Finance and Restructuring at 41%, with the rest split across litigation, economics, technology, and communications in a billable-professional model where senior headcount sets the growth ceiling.

Profit is a function of deploying senior professionals at high utilization; the segment mix (restructuring pays materially better than litigation) and the direction of billable headcount determine whether operating margin expands or compresses.

Business quality (Mixed): A 5% grower with 9% operating margin and a shrinking billable base, but a 19% CAGR in the restructuring engine plus consistent buybacks keep the 16.8x multiple reasonable for a pure-play advisory name.

Valuation: Trades at 17× trailing earnings · $4.3B market cap.

Bull case

• Restructuring grows in a soft market: Management confirmed global restructuring revenue grew 8% despite uneven activity (Q2 FY26 call). At 41% of revenue and 19.2% YoY in the most recent filing quarter, this is the earnings engine, and its resilience in a soft deal cycle supports the top-line trajectory.
• Economic consulting reversing: Econ delivered a meaningful sequential recovery across EMEA and North America (Q2 FY26 call). This 18% segment had been declining (down 2.4% YoY in the filing period), so a put-together recovery adds roughly 3 to 4 points of group growth headroom over the next two quarters.
• Buybacks shrink the float: Share repurchases materially reduced the share count and continued despite ongoing talent investments (Q2 FY26 call). With a P/E of 16.8x, trimming the share base directly lifts EPS even if revenue growth stays modest in the high-4 to 5% range.

Bear case

• Regulatory enforcement fading: Management flagged that lower regulatory enforcement is reducing volumes in Forensic and Litigation Consulting (Q2 FY26 call). That segment is 19% of revenue and already grew only 1.2% YoY; a structural decline in enforcement matters shifts the mix away from higher-margin litigation work.
• M&A deals getting shorter: Faster merger clearances could shorten and reduce the intensity of M&A engagements (Q2 FY26 call). If antitrust review timelines compress, the 41% restructuring segment sees fewer high-fee, multi-quarter transactions, capping the very growth that makes the stock attractive.
• Billable headcount is shrinking: Billable headcount declined 7.9% year over year (operating data), even as the company added 283 billable professionals in the same period. Net attrition is eating the capacity base; without a meaningful reversal, revenue growth is physically constrained regardless of demand.

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