Navigant Consulting (NYSE:NCI) reported a tough Q1 with revenues down nearly 6% year-over-year, with revenue declines coming across its entire practice save for improvement in the Healthcare segment. While some of the underperformance was attributed to weather conditions which prevented Navigant consultants from traveling to client sites and accrue billable hours, the other detractor from the quarter came from unpredictability in the revenue stream.
Generally speaking, the problem with investing in publicly-traded consulting firms like Navigant is the fact that the revenue model is transactional by nature and reactionary to the gails of the regulatory environment. Because of that, revenue streams can be unpredictable, lumpy and create volatility in equity prices. Unpredictability, in my view, is a key...
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