What Happened?
Shares of business advisory firm FTI Consulting (NYSE: FCN) jumped 4.3% in the afternoon session after its CEO, Chairman, and President, Steven Henry Gunby, purchased 7,500 shares of the company's common stock for a total of $1.13 million. The transaction, priced at $151.12 per share, was seen by investors as a strong vote of confidence, particularly as the purchase occurred while the stock was trading near its 52-week low. Insider buying is often interpreted as a signal that the company's leadership believes the stock is undervalued and expects it to perform well in the future. This move was the only insider purchase for FTI Consulting over the previous year.
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What Is The Market Telling Us
FTI Consulting’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 5.4% on the news that the company lowered its full-year earnings and revenue forecast, signaling a more challenging outlook ahead. The lowered forecast overshadowed second-quarter results that beat Wall Street estimates. FTI reported Q2 revenue of $943.7 million and adjusted EBITDA of $111.6 million, surpassing analysts' expectations. However, the company cut its full-year earnings per share (EPS) projection to a range of $7.24 to $7.84, down from a previous forecast of $7.44 to $8.24. The revenue outlook for the year was also trimmed. The mixed performance reflected varied results across its business units, as revenue growth in its Corporate Finance, Forensic and Litigation, and Strategic Communications segments was offset by declines in its Economic Consulting and Technology segments. Overall, the negative forward-looking statements appeared to weigh more heavily on investors than the quarterly beat.
FTI Consulting is down 12.6% since the beginning of the year, and at $165.92 per share, it is trading 19.1% below its 52-week high of $204.99 from December 2024. Investors who bought $1,000 worth of FTI Consulting’s shares 5 years ago would now be looking at an investment worth $1,518.
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