Reported (adjusted for restructuring and currency) EPS of $2.16 missed our $2.23 estimate.
The shortfall relative to our estimate was due to interest expenses and other income of $3.4 million during the quarter, compared to our forecast of $0.7 million.
Revenue of $210.8 million was up 12.8% year-over-year and $15.4 million above our estimate due to broad-based strength.
Six practices (Energy, Finance, Forensic Services, Intellectual Property, Life Sciences and Risk, Investigations and Analytics) reported double-digit year-over-year revenue growth, leading management to increase 2026 revenue guidance to a range (on a constant currency basis) of $805-$820 million (up from $785-$805 million).
Given the increased debt levels during the year, we view our prior interest expense estimate as simply too low.
We fine tune our 2026 EPS estimate to $8.77 (from $8.98) in 2026 and maintain our estimate of $10.16 in 2027. Our EPS estimates imply annual growth of 6.5% and 15.9%, respectively.
Our free cash flow per share (excluding the add back of stock-based compensation expense) estimates of $11.60 (from $11.85) in 2026 and $13.13 in 2027 imply respective FCF yields of 6.6% and 7.4%.
Our $256 price target is based on 24x our 2027 EPS estimate of $10.16, plus projected year-end 2027 net cash per share of $12.40. The prior $260 price target was based projected year-end 2027 net cash per share of $17.07. On a P/E-only basis, our price target implies a 25.2x multiple to our 2027 EPS estimate, which we view as consistent with leading consulting peers. Strong fundaments, high client retention and free cash flow generation support our valuation and moderate risk rating, in our view.
07 Aug 2026
Reported 2Q:26 EPS Missed Our Estimate On Interest Expenses Despite Outsized Revenue Growth; We Trim Our 2026 EPS Estimate To Reflect Higher Costs; Trim Price Target To $256 (From $260)
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Reported 2Q:26 EPS Missed Our Estimate On Interest Expenses Despite Outsized Revenue Growth; We Trim Our 2026 EPS Estimate To Reflect Higher Costs; Trim Price Target To $256 (From $260)
Reported (adjusted for restructuring and currency) EPS of $2.16 missed our $2.23 estimate.
The shortfall relative to our estimate was due to interest expenses and other income of $3.4 million during the quarter, compared to our forecast of $0.7 million.
Revenue of $210.8 million was up 12.8% year-over-year and $15.4 million above our estimate due to broad-based strength.
Six practices (Energy, Finance, Forensic Services, Intellectual Property, Life Sciences and Risk, Investigations and Analytics) reported double-digit year-over-year revenue growth, leading management to increase 2026 revenue guidance to a range (on a constant currency basis) of $805-$820 million (up from $785-$805 million).
Given the increased debt levels during the year, we view our prior interest expense estimate as simply too low.
We fine tune our 2026 EPS estimate to $8.77 (from $8.98) in 2026 and maintain our estimate of $10.16 in 2027. Our EPS estimates imply annual growth of 6.5% and 15.9%, respectively.
Our free cash flow per share (excluding the add back of stock-based compensation expense) estimates of $11.60 (from $11.85) in 2026 and $13.13 in 2027 imply respective FCF yields of 6.6% and 7.4%.
Our $256 price target is based on 24x our 2027 EPS estimate of $10.16, plus projected year-end 2027 net cash per share of $12.40. The prior $260 price target was based projected year-end 2027 net cash per share of $17.07. On a P/E-only basis, our price target implies a 25.2x multiple to our 2027 EPS estimate, which we view as consistent with leading consulting peers. Strong fundaments, high client retention and free cash flow generation support our valuation and moderate risk rating, in our view.