Key Takeaways
- FTI Consulting (FCN) jumped 14% on Thursday after third-quarter adjusted EPS of $3.84 beat the $2.74 consensus.
- Management put the quarter at about $2.90 a share without one-time items, and the raised guidance implies a much weaker fourth quarter.
- Perella Weinberg Partners (PWP) grew revenue 53% on bigger fees, while Houlihan Lokey (HLI) saw restructuring revenue fall but expects it to pick up.
- FTI went into the report at 15x forward earnings, well below its 22x five-year average.
FTI Consulting shares jumped 14% on Thursday to close at $181.24 after record third-quarter results and a raised full-year outlook.
FTI wasn’t the only adviser cashing big fees. Perella Weinberg Partners reported a 53% revenue jump the same morning, while Houlihan Lokey showed restructuring slowing.
A Record, With Some Help
Revenue topped $1 billion for the first time, and all five segments grew. Adjusted EPS of $3.84 crushed the $2.74 consensus, and FTI raised its full-year range to $9.50 to $10.00, from $9.10 to $9.70.
CEO Steven Gunby credited one-time items such as “record success fees and a lower effective tax rate.” But at their core, he said, the results show that “our clients are increasingly turning to us.” Corporate Finance’s success fees alone hit a record $40.7 million, including a large one from selling a loan portfolio for the Federal Reserve Bank of Boston. On the Q3 2026 earnings call, Gunby said that even after stripping those items out, he couldn’t get the quarter much below $2.90 a share, against an average in the low $2s over the prior four quarters.
FTI’s EBITDA margin ran between about 8% and 14% over the eight quarters through June.
Its third-quarter adjusted EBITDA margin, which leaves out the $46 million charge, hit 15.2%, up from 13.7% a year earlier.
A Weaker Fourth Quarter
With $7.79 of adjusted EPS through September, the new range implies $1.71 to $2.21 in the fourth quarter. That’s roughly half what FTI just earned, and below even Gunby’s $2.90 normalized figure for the third quarter. He did note that the third quarter is usually FTI’s strongest and the fourth almost never is.
Management pointed to lower restructuring, M&A and regulatory volume in a seasonally slower quarter, and expects its tax rate to rise to about 23% from 17.8%.
Analysts went in expecting $9.27 of adjusted EPS this year and $10.87 in 2027.
This year’s number should rise toward the new range, and 2027’s has a reason to move too. FTI took a $46 million charge in the quarter to cut staff, which pushed GAAP EPS down 10% to $2.35, and it expects about $80 million a year in savings, only about $15 million of it in the fourth quarter. If all of it reached the bottom line, that’s roughly $2.30 a share after tax, though FTI plans to keep hiring senior talent. Gunby also said he sees no reason GAAP and adjusted earnings shouldn’t match next year.
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Big Fees Across the Street
Perella Weinberg’s revenue rose 53% to $251 million, helped by more fees over $5 million. About $55 million of that came from deals that closed in the first days of October but counted in the third quarter. CEO Andrew Bednar said the firm is “carrying strong momentum into the fourth quarter and 2027.” That’s a sunnier read than FTI’s, and the stock closed up 8%.
Houlihan Lokey’s restructuring revenue fell 12% to $118 million in its quarter to September as fewer deals closed: 27, down from 37. Houlihan blamed the timing of closings rather than weaker demand, and it expects restructuring revenue to stay elevated through its fiscal 2028. Its shares are up about 2% since it reported on Wednesday evening.
The Jump Looks Earned
Before the report, FTI traded at 15x forward earnings, near its five-year low of 13x and far below its 22x average.
At Thursday’s close, it’s about 17x.
Even on management’s $2.90 figure, this was well above FTI’s average quarter over the past year, and 17x still sits far under its own average. FTI expects restructuring demand to hold steady near term, so Houlihan’s outlook is the upside case, not the base one. The Investor Day FTI plans for early next year is where management will have to put numbers on its multiyear outlook.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
