• If you have been wondering whether FTI Consulting at around US$178.96 is offering good value today, the starting point is to understand how the current price lines up with different valuation checks.
• Recently, the stock has seen a 10.1% move over the last 30 days, even though the past week showed a 3.0% decline and the 1 year return sits at 8.5%, with 3 year and 5 year returns at 11.5% decline and 22.8% respectively.
• This mix of shorter term strength and longer term ups and downs has put FTI Consulting on the radar for investors watching for shifts in perceived risk and opportunity. While there is no single headline event behind these moves, the pattern of returns itself is useful context for judging whether the current price still lines up with fundamentals.
• Right now, FTI Consulting only scores 1 out of 6 on our valuation checks for being potentially undervalued. The next step is to look at what different valuation methods say about the stock and then circle back to an even richer way to think about value at the end of this article.

FTI Consulting scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: FTI Consulting Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business might be worth by projecting its future cash flows and then discounting those back to today using a required rate of return. It is essentially asking what all future cash generated by the company is worth in today’s dollars.

For FTI Consulting, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $102.63 million. Simply Wall St then projects annual Free Cash Flow out to 2035, with estimates such as $90.64 million in 2026 and $87.46 million in 2035, and discounts each of those figures back to today.

Pulling all those discounted cash flows together gives an estimated intrinsic value of about $53.58 per share. Compared with the current share price of about $178.96, the DCF output suggests the stock is very expensive, with the DCF indicating it is about 234.0% above the model’s estimate of fair value.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests FTI Consulting may be overvalued by 234.0%. Discover 57 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: FTI Consulting Price vs Earnings

For a profitable business like FTI Consulting, the P/E ratio is a straightforward way to link what you pay for each share to the earnings that support it. Investors typically accept a higher P/E when they expect stronger earnings growth or see the business as lower risk, while slower expected growth or higher perceived risk usually line up with a lower P/E being seen as reasonable.

FTI Consulting currently trades on a P/E of about 19.83x. That sits close to the Professional Services industry average of around 19.51x and below the peer group average of roughly 28.74x. Simply Wall St also calculates a proprietary “Fair Ratio” for the stock, which is 19.70x. This Fair Ratio is designed to reflect what might be a more tailored P/E for FTI Consulting by considering factors such as its earnings profile, industry, profit margins, company size and specific risks, rather than relying only on broad peer or industry comparisons.

Because this Fair Ratio is very close to the actual P/E of 19.83x, the multiple suggests the current price is broadly in line with what the model regards as reasonable.

Result: ABOUT RIGHT

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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 think about valuation. Meet Narratives, where you set out your story for FTI Consulting by linking your assumptions for revenue, earnings, margins and a fair value to a clear forecast. You can then compare that fair value to the current price to decide whether the stock looks attractive or expensive. Simply Wall St’s Community page can keep that view updated as new information comes through, such as the US$173.50 analyst fair value, the 6.1% revenue growth assumption, the 8.1% margin outlook, the 14.1x future P/E and any management or product news. One investor might build a more optimistic narrative around regulatory complexity and IQ.AI adoption supporting higher quality earnings, while another might focus on automation risk, competition and a lower future P/E multiple and arrive at a more cautious fair value. Both investors can use the same shared tool yet reach very different conclusions.

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.