FCN

FTI is a high-quality, multi-segment expert-services franchise (Corporate Finance, FLC, Economic Consulting, Compass Lexecon, Technology, Strategic Communications) with a long record of profitable growth — revenue compounded from $2.78B in FY2021 to $3.79B in FY2025 and net income from $235M to $271M. At $144.35 the stock trades at 17.5x FY25 diluted EPS of $8.24 and just 1.2x sales, which is undemanding for a counter-cyclical professional-services firm with 15.6% ROE and a 1.01x liabilities/equity balance sheet.

But FY2025 is a tale of two stories. Operating income rose +12.0% to $389M, yet net income fell -3.3% to $271M and — most importantly — operating cash flow collapsed -61.5% to $152M while capex jumped +65.3% to $58.5M, leaving thin free cash flow. Despite that, the company paid $859M in buybacks (vs. ~$10M the prior year), drawing cash down -59.9% to $265M and shrinking equity -23.2%. Liabilities rose +31.2%. The MD&A notes Q4 repurchases at $159.99–$169.02 — meaningfully above today's $144.35, so the buyback has destroyed value in hindsight. The 15-year London lease (possession Sept 2027) layers a long-dated fixed commitment onto a business whose revenue growth has decelerated to +2.4%.