- Wondering if FTI Consulting at around US$162.58 is fairly priced, too expensive, or offering value right now? This article walks through the key signals you can use to judge that for yourself.
- The stock has been under some pressure recently, with a 3.0% decline over the last week, a flat 0.1% slip over the past month, and returns of 4.5% lower year to date and 0.7% lower over the past year, even though the 5 year return sits at 18.5%.
- These moves sit against a backdrop of ongoing interest in professional services firms like FTI Consulting. Investors often watch closely for contract wins, restructuring mandates, or shifts in demand for advisory work. While this article is not tied to a specific headline, it aims to give you a steady reference point that does not depend on short term news flow.
- On Simply Wall St's 6 point valuation checklist, FTI Consulting currently scores 3 out of 6. The sections that follow will step through earnings based, cash flow based, and market based approaches to that number, before finishing with a different way of thinking about valuation that can help you put all of these methods in context.
Approach 1: FTI Consulting Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and then discounting those back to today’s dollars.
For FTI Consulting, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $102.6 million. Simply Wall St then applies its own estimates to project Free Cash Flow each year out to 2035, with figures such as $90.6 million in 2026 and $87.5 million in 2035. Analysts typically provide forecasts for up to 5 years, so the later years reflect an extrapolation of those earlier expectations.
After discounting all those projected cash flows back to today, the model arrives at an estimated intrinsic value of about $54.31 per share. Compared with a recent share price around $162.58, this model output suggests FTI Consulting is very expensive on this DCF view, with the stock assessed as 199.4% overvalued.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests FTI Consulting may be overvalued by 199.4%. Discover 48 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: FTI Consulting Price vs Earnings
For a profitable company like FTI Consulting, the P/E ratio is a useful shorthand because it links what you pay per share to the earnings that each share generates. Investors usually accept a higher P/E if they expect stronger earnings growth or see lower risk, and look for a lower P/E when growth is more modest or risks feel higher.
FTI Consulting is trading on a P/E of 18.0x. That sits close to both the Professional Services industry average P/E of about 18.9x and the peer group average of 19.3x. Simply Wall St also calculates a “Fair Ratio” for the stock of 20.4x, which is the P/E it would expect given factors such as FTI Consulting’s earnings growth profile, industry, profit margins, market cap and risk characteristics.
This Fair Ratio is more tailored than a simple comparison with peers or the broad industry because it tries to align valuation with the company’s own fundamentals rather than relying only on what others trade at. With the current P/E of 18.0x sitting below the Fair Ratio of 20.4x, this framework points to FTI Consulting appearing undervalued on an earnings multiple basis.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your FTI Consulting Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple tool on Simply Wall St’s Community page that lets you spell out your own story for FTI Consulting by linking your assumptions for future revenue, earnings, margins and fair value to a clear forecast, then comparing that fair value with the current share price and watching it update automatically when news or earnings arrive. For example, one investor might build a bullish FTI Consulting Narrative around expanding regulatory complexity, rising digital risks, IQ.AI adoption, international growth and a fair value of US$185 per share. A more cautious investor might focus on automation risk, regulatory volatility, talent integration issues, competition and the updated fair value of US$174. Both Narratives give you a structured way to decide whether the current price of about US$162.58 looks high, low, or roughly in line with your own expectations.
Do you think there's more to the story for FTI Consulting? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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