KORN FERRY (KFY) Stock Fundamental Analysis
NYSE:KFY - New York Stock Exchange, Inc. - US5006432000 - Common Stock - Currency: USD
Taking everything into account, KFY scores 6 out of 10 in our fundamental rating. KFY was compared to 82 industry peers in the Professional Services industry. KFY scores excellent on profitability, but there are some minor concerns on its financial health. KFY is valued quite cheap, while showing a decent growth score. This is a good combination! Finally KFY also has an excellent dividend rating. With these ratings, KFY could be worth investigating further for value and dividend investing!.
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.
Each year in the past 5 years KFY had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 6.67%, KFY is doing good in the industry, outperforming 65.85% of the companies in the same industry.
With a decent Return On Equity value of 13.58%, KFY is doing good in the industry, outperforming 62.20% of the companies in the same industry.
KFY has a better Return On Invested Capital (8.88%) than 63.41% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KFY is below the industry average of 13.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.67% | ||
| ROE | 13.58% | ||
| ROIC | 8.88% |
ROA(3y)6.48%
ROA(5y)5.38%
ROE(3y)14.22%
ROE(5y)11.87%
ROIC(3y)11.01%
ROIC(5y)9.47%
1.3 Margins
KFY has a better Profit Margin (8.88%) than 79.27% of its industry peers.
In the last couple of years the Profit Margin of KFY has grown nicely.
Looking at the Operating Margin, with a value of 12.26%, KFY belongs to the top of the industry, outperforming 81.71% of the companies in the same industry.
In the last couple of years the Operating Margin of KFY has grown nicely.
Looking at the Gross Margin, with a value of 88.65%, KFY belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
In the last couple of years the Gross Margin of KFY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.26% | ||
| PM (TTM) | 8.88% | ||
| GM | 88.65% |
OM growth 3Y0.31%
OM growth 5Y7.72%
PM growth 3Y-1.08%
PM growth 5Y2.91%
GM growth 3Y-2.65%
GM growth 5Y-1.24%
2. Health
2.1 Basic Checks
KFY has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for KFY has been reduced compared to 1 year ago.
The number of shares outstanding for KFY has been reduced compared to 5 years ago.
KFY has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.93 indicates that KFY is not a great score, but indicates only limited risk for bankruptcy at the moment.
KFY has a Altman-Z score (2.93) which is comparable to the rest of the industry.
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 better Debt to FCF ratio (1.26) than 75.61% 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.
Looking at the Debt to Equity ratio, with a value of 0.22, KFY is in line with its industry, outperforming 56.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.26 | ||
| Altman-Z | 2.93 |
ROIC/WACC1.04
WACC8.56%
2.3 Liquidity
A Current Ratio of 1.90 indicates that KFY should not have too much problems paying its short term obligations.
KFY's Current ratio of 1.90 is fine compared to the rest of the industry. KFY outperforms 75.61% of its industry peers.
A Quick Ratio of 1.90 indicates that KFY should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.90, KFY is doing good in the industry, outperforming 75.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.9 |
3. Growth
3.1 Past
KFY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.80%, which is quite good.
The Earnings Per Share has been growing slightly by 5.26% on average over the past years.
KFY shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -22.57%.
Measured over the past years, KFY shows a small growth in Revenue. The Revenue has been growing by 7.21% on average per year.
EPS 1Y (TTM)19.8%
EPS 3Y19.56%
EPS 5Y5.26%
EPS Q2Q%11.21%
Revenue 1Y (TTM)-22.57%
Revenue growth 3Y15.38%
Revenue growth 5Y7.21%
Sales Q2Q%0.01%
3.2 Future
KFY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.24% yearly.
KFY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.61% yearly.
EPS Next Y13.95%
EPS Next 2Y8.8%
EPS Next 3Y12.24%
EPS Next 5YN/A
Revenue Next Year-2.04%
Revenue Next 2Y0.8%
Revenue Next 3Y2.61%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 12.87, which indicates a correct valuation of KFY.
Based on the Price/Earnings ratio, KFY is valued a bit cheaper than 74.39% of the companies in the same industry.
KFY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.92.
With a Price/Forward Earnings ratio of 12.26, KFY is valued correctly.
Based on the Price/Forward Earnings ratio, KFY is valued a bit cheaper than the industry average as 79.27% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.65. KFY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.87 | ||
| Fwd PE | 12.26 |
4.2 Price Multiples
86.59% of the companies in the same industry are more expensive than KFY, based on the Enterprise Value to EBITDA ratio.
90.24% of the companies in the same industry are more expensive than KFY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.17 | ||
| EV/EBITDA | 6.62 |
4.3 Compensation for Growth
KFY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
KFY has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as KFY's earnings are expected to grow with 12.24% in the coming years.
PEG (NY)0.92
PEG (5Y)2.45
EPS Next 2Y8.8%
EPS Next 3Y12.24%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.16%, 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 2.40. KFY pays more dividend than 92.68% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.51, KFY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
5.2 History
On average, the dividend of KFY grows each year by 20.17%, which is quite nice.
KFY has been paying a dividend for at least 10 years, so it has a reliable track record.
As KFY did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
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 2Y8.8%
EPS Next 3Y12.24%
62.27
+0.29 (+0.47%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners100.65%
Inst Owner Change0.3%
Ins Owners1.02%
Ins Owner Change0%
Market Cap3.22B
Analysts82.22
Price Target82.88 (33.1%)
Short Float %2.33%
Short Ratio2.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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)0%
PT rev (3m)-0.31%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.79%
EPS NY rev (1m)1.6%
EPS NY rev (3m)1.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.89%
Revenue NY rev (1m)0.66%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.87 | ||
| Fwd PE | 12.26 | ||
| P/S | 1.17 | ||
| P/FCF | 10.17 | ||
| P/OCF | 8.68 | ||
| P/B | 1.79 | ||
| P/tB | 4.15 | ||
| EV/EBITDA | 6.62 |
EPS(TTM)4.84
EY7.77%
EPS(NY)5.08
Fwd EY8.16%
FCF(TTM)6.12
FCFY9.84%
OCF(TTM)7.17
OCFY11.52%
SpS53.07
BVpS34.71
TBVpS15
PEG (NY)0.92
PEG (5Y)2.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.67% | ||
| ROE | 13.58% | ||
| ROCE | 11.87% | ||
| ROIC | 8.88% | ||
| ROICexc | 12.49% | ||
| ROICexgc | 25.29% | ||
| OM | 12.26% | ||
| PM (TTM) | 8.88% | ||
| GM | 88.65% | ||
| FCFM | 11.54% |
ROA(3y)6.48%
ROA(5y)5.38%
ROE(3y)14.22%
ROE(5y)11.87%
ROIC(3y)11.01%
ROIC(5y)9.47%
ROICexc(3y)17.79%
ROICexc(5y)15.2%
ROICexgc(3y)41.95%
ROICexgc(5y)34.61%
ROCE(3y)14.73%
ROCE(5y)12.67%
ROICexcg growth 3Y10.94%
ROICexcg growth 5Y5.6%
ROICexc growth 3Y7.02%
ROICexc growth 5Y6.04%
OM growth 3Y0.31%
OM growth 5Y7.72%
PM growth 3Y-1.08%
PM growth 5Y2.91%
GM growth 3Y-2.65%
GM growth 5Y-1.24%
F-Score8
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 | 2.93 |
F-Score8
WACC8.56%
ROIC/WACC1.04
Cap/Depr(3y)83.87%
Cap/Depr(5y)75.39%
Cap/Sales(3y)2.1%
Cap/Sales(5y)2.02%
Profit Quality(3y)137.69%
Profit Quality(5y)159.59%
High Growth Momentum
Growth
EPS 1Y (TTM)19.8%
EPS 3Y19.56%
EPS 5Y5.26%
EPS Q2Q%11.21%
EPS Next Y13.95%
EPS Next 2Y8.8%
EPS Next 3Y12.24%
EPS Next 5YN/A
Revenue 1Y (TTM)-22.57%
Revenue growth 3Y15.38%
Revenue growth 5Y7.21%
Sales Q2Q%0.01%
Revenue Next Year-2.04%
Revenue Next 2Y0.8%
Revenue Next 3Y2.61%
Revenue Next 5YN/A
EBIT growth 1Y-0.07%
EBIT growth 3Y15.74%
EBIT growth 5Y15.48%
EBIT Next Year54.06%
EBIT Next 3Y21.12%
EBIT Next 5YN/A
FCF growth 1Y4.65%
FCF growth 3Y1.27%
FCF growth 5Y1.53%
OCF growth 1Y-0.7%
OCF growth 3Y4.14%
OCF growth 5Y1.87%