KORN FERRY (KFY) Stock Fundamental Analysis
NYSE:KFY - New York Stock Exchange, Inc. - US5006432000 - Common Stock - Currency: USD
KFY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. KFY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. KFY is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
KFY had positive earnings in the past year.
KFY had a positive operating cash flow in the past year.
KFY had positive earnings in each of the past 5 years.
Of the past 5 years KFY 4 years had a positive operating cash flow.
1.2 Ratios
KFY has a Return On Assets of 6.67%. This is in the better half of the industry: KFY outperforms 65.43% of its industry peers.
Looking at the Return On Equity, with a value of 13.58%, KFY is in the better half of the industry, outperforming 60.49% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.92%, KFY is in the better half of the industry, outperforming 65.43% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for KFY is below the industry average of 12.36%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.67% | ||
| ROE | 13.58% | ||
| ROIC | 8.92% |
ROA(3y)5.54%
ROA(5y)5.9%
ROE(3y)11.73%
ROE(5y)12.81%
ROIC(3y)9.22%
ROIC(5y)9.66%
1.3 Margins
KFY has a Profit Margin of 8.88%. This is amongst the best in the industry. KFY outperforms 80.25% of its industry peers.
KFY's Profit Margin has improved in the last couple of years.
The Operating Margin of KFY (12.26%) is better than 82.72% of its industry peers.
KFY's Operating Margin has been stable in the last couple of years.
The Gross Margin of KFY (88.65%) is better than 97.53% of its industry peers.
KFY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.26% | ||
| PM (TTM) | 8.88% | ||
| GM | 88.65% |
OM growth 3Y-11.48%
OM growth 5Y1.23%
PM growth 3Y-9.61%
PM growth 5Y11.17%
GM growth 3Y-2.33%
GM growth 5Y-1.06%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), KFY is creating some value.
Compared to 1 year ago, KFY has less shares outstanding
KFY has less shares outstanding than it did 5 years ago.
The debt/assets ratio for KFY has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.13 indicates that KFY is not in any danger for bankruptcy at the moment.
KFY has a Altman-Z score (3.13) which is in line with its industry peers.
KFY has a debt to FCF ratio of 1.26. This is a very positive value and a sign of high solvency as it would only need 1.26 years to pay back of all of its debts.
KFY has a Debt to FCF ratio of 1.26. This is in the better half of the industry: KFY outperforms 76.54% of its industry peers.
KFY has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of KFY (0.22) is better than 60.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.26 | ||
| Altman-Z | 3.13 |
ROIC/WACC1.04
WACC8.58%
2.3 Liquidity
KFY has a Current Ratio of 1.90. This is a normal value and indicates that KFY is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.90, KFY is in the better half of the industry, outperforming 70.37% of the companies in the same industry.
KFY has a Quick Ratio of 1.90. This is a normal value and indicates that KFY is financially healthy and should not expect problems in meeting its short term obligations.
KFY's Quick ratio of 1.90 is fine compared to the rest of the industry. KFY outperforms 70.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.9 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.22% over the past year.
The Earnings Per Share has been growing by 10.91% on average over the past years. This is quite good.
KFY shows a decrease in Revenue. In the last year, the revenue decreased by -1.23%.
KFY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.91% yearly.
EPS 1Y (TTM)14.22%
EPS 3Y-7.74%
EPS 5Y10.91%
EPS Q2Q%4.76%
Revenue 1Y (TTM)-1.23%
Revenue growth 3Y1.46%
Revenue growth 5Y6.91%
Sales Q2Q%3.07%
3.2 Future
The Earnings Per Share is expected to grow by 9.78% on average over the next years. This is quite good.
KFY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.55% yearly.
EPS Next Y3.39%
EPS Next 2Y11.15%
EPS Next 3Y9.78%
EPS Next 5YN/A
Revenue Next Year2.12%
Revenue Next 2Y4.91%
Revenue Next 3Y4.55%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 15.10, the valuation of KFY can be described as correct.
Based on the Price/Earnings ratio, KFY is valued a bit cheaper than the industry average as 75.31% of the companies are valued more expensively.
KFY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.45.
KFY is valuated correctly with a Price/Forward Earnings ratio of 14.60.
71.60% of the companies in the same industry are more expensive than KFY, based on the Price/Forward Earnings ratio.
KFY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.1 | ||
| Fwd PE | 14.6 |
4.2 Price Multiples
85.19% of the companies in the same industry are more expensive than KFY, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, KFY is valued cheaper than 81.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.08 | ||
| EV/EBITDA | 8.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KFY does not grow enough to justify the current Price/Earnings ratio.
KFY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.45
PEG (5Y)1.38
EPS Next 2Y11.15%
EPS Next 3Y9.78%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.60%, KFY has a reasonable but not impressive dividend return.
KFY's Dividend Yield is rather good when compared to the industry average which is at 2.06. KFY pays more dividend than 90.12% of the companies in the same industry.
KFY's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
5.2 History
On average, the dividend of KFY grows each year by 20.17%, which is quite nice.
KFY has paid a dividend for at least 10 years, which is a reliable track record.
KFY has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)20.17%
Div Incr Years4
Div Non Decr Years9
5.3 Sustainability
KFY pays out 31.25% of its income as dividend. This is a sustainable payout ratio.
The dividend of KFY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.25%
EPS Next 2Y11.15%
EPS Next 3Y9.78%
73.98
-0.66 (-0.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners98.98%
Inst Owner Change-49.3%
Ins Owners1.02%
Ins Owner Change-2.77%
Market Cap3.82B
Analysts82.22
Price Target85.43 (15.48%)
Short Float %3.03%
Short Ratio3.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
Yearly Dividend1.04
Dividend Growth(5Y)20.17%
DP31.25%
Div Incr Years4
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.65%
Min EPS beat(2)-1.15%
Max EPS beat(2)4.45%
EPS beat(4)3
Avg EPS beat(4)4.7%
Min EPS beat(4)-1.15%
Max EPS beat(4)10.99%
EPS beat(8)6
Avg EPS beat(8)4.07%
EPS beat(12)9
Avg EPS beat(12)4.36%
EPS beat(16)13
Avg EPS beat(16)7.33%
Revenue beat(2)1
Avg Revenue beat(2)0.33%
Min Revenue beat(2)-1.14%
Max Revenue beat(2)1.79%
Revenue beat(4)2
Avg Revenue beat(4)0.09%
Min Revenue beat(4)-1.14%
Max Revenue beat(4)1.79%
Revenue beat(8)6
Avg Revenue beat(8)0.77%
Revenue beat(12)9
Avg Revenue beat(12)1.46%
Revenue beat(16)13
Avg Revenue beat(16)2.98%
PT rev (1m)6.35%
PT rev (3m)3.08%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)-5.64%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.1 | ||
| Fwd PE | 14.6 | ||
| P/S | 1.39 | ||
| P/FCF | 12.08 | ||
| P/OCF | 10.32 | ||
| P/B | 2.13 | ||
| P/tB | 4.93 | ||
| EV/EBITDA | 8.08 |
EPS(TTM)4.9
EY6.62%
EPS(NY)5.07
Fwd EY6.85%
FCF(TTM)6.12
FCFY8.28%
OCF(TTM)7.17
OCFY9.69%
SpS53.07
BVpS34.71
TBVpS15
PEG (NY)4.45
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.67% | ||
| ROE | 13.58% | ||
| ROCE | 11.87% | ||
| ROIC | 8.92% | ||
| ROICexc | 12.56% | ||
| ROICexgc | 25.42% | ||
| OM | 12.26% | ||
| PM (TTM) | 8.88% | ||
| GM | 88.65% | ||
| FCFM | 11.54% |
ROA(3y)5.54%
ROA(5y)5.9%
ROE(3y)11.73%
ROE(5y)12.81%
ROIC(3y)9.22%
ROIC(5y)9.66%
ROICexc(3y)14.23%
ROICexc(5y)15.55%
ROICexgc(3y)33.38%
ROICexgc(5y)35.67%
ROCE(3y)12.26%
ROCE(5y)12.85%
ROICexcg growth 3Y-18.52%
ROICexcg growth 5Y3.12%
ROICexc growth 3Y-17.47%
ROICexc growth 5Y2.05%
OM growth 3Y-11.48%
OM growth 5Y1.23%
PM growth 3Y-9.61%
PM growth 5Y11.17%
GM growth 3Y-2.33%
GM growth 5Y-1.06%
F-Score7
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.26 | ||
| Debt/EBITDA | 0.96 | ||
| Cap/Depr | 67.86% | ||
| Cap/Sales | 1.97% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 89.07% | ||
| Profit Quality | 129.99% | ||
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.9 | ||
| Altman-Z | 3.13 |
F-Score7
WACC8.58%
ROIC/WACC1.04
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.22%
EPS 3Y-7.74%
EPS 5Y10.91%
EPS Q2Q%4.76%
EPS Next Y3.39%
EPS Next 2Y11.15%
EPS Next 3Y9.78%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.23%
Revenue growth 3Y1.46%
Revenue growth 5Y6.91%
Sales Q2Q%3.07%
Revenue Next Year2.12%
Revenue Next 2Y4.91%
Revenue Next 3Y4.55%
Revenue Next 5YN/A
EBIT growth 1Y-0.07%
EBIT growth 3Y-10.18%
EBIT growth 5Y8.22%
EBIT Next Year34.33%
EBIT Next 3Y17.27%
EBIT Next 5YN/A
FCF growth 1Y48.16%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y35.58%
OCF growth 3YN/A
OCF growth 5YN/A