April 11, 2019

NCI – Market expectations are for NCI to see slight improvements in Uniform ROA, although it is still projected to be below recent averages, due to their recent value-destructive divestiture

  • Navigant Consulting, Inc. (NCI:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 15.6x Uniform P/E. Even at these levels, the market is pricing in expectations for Uniform ROA to improve from a low of 9% in 2018 to 11% in 2023
  • Specifically, markets appear optimistic about the competitive position of the firm’s remaining industry segments and the potential to drive top-line growth. However, they may be skeptical of the benefits of a simplified portfolio and increased revenue visibility outweighing the drawbacks of their Thoreau divestiture and pessimistic about the associated loss of the high-margin Disputes, Forensics & Legal Technology segment
To read this Embedded Expectations Analysis report in its entirety, please log into the Valens Research web app. If you don't have an account, you can sign up for the 30-day trial.