KORN FERRY (KFY) Stock Fundamental Analysis
NYSE:KFY - New York Stock Exchange, Inc. - US5006432000 - Common Stock - Currency: USD
Taking everything into account, KFY scores 7 out of 10 in our fundamental rating. KFY was compared to 82 industry peers in the Professional Services industry. KFY gets an excellent profitability rating and is at the same time showing great financial health properties. KFY may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make KFY suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year KFY was profitable.
KFY had a positive operating cash flow in the past year.
KFY had positive earnings in each of the past 5 years.
KFY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of KFY (6.91%) is better than 69.62% of its industry peers.
KFY has a Return On Equity of 13.71%. This is in the better half of the industry: KFY outperforms 60.76% of its industry peers.
KFY has a Return On Invested Capital of 8.15%. This is comparable to the rest of the industry: KFY outperforms 59.49% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KFY is below the industry average of 13.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.91% | ||
| ROE | 13.71% | ||
| ROIC | 8.15% |
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
Looking at the Profit Margin, with a value of 8.89%, KFY belongs to the top of the industry, outperforming 81.01% of the companies in the same industry.
In the last couple of years the Profit Margin of KFY has grown nicely.
Looking at the Operating Margin, with a value of 11.17%, KFY is in the better half of the industry, outperforming 79.75% of the companies in the same industry.
KFY's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 88.72%, KFY belongs to the best of the industry, outperforming 96.20% 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 | 11.17% | ||
| PM (TTM) | 8.89% | ||
| GM | 88.72% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so KFY is still 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.
Compared to 1 year ago, KFY has an improved debt to assets ratio.
2.2 Solvency
KFY has an Altman-Z score of 3.09. This indicates that KFY is financially healthy and has little risk of bankruptcy at the moment.
KFY has a Altman-Z score (3.09) which is in line with its industry peers.
The Debt to FCF ratio of KFY is 1.46, which is an excellent value as it means it would take KFY, only 1.46 years of fcf income to pay off all of its debts.
KFY has a Debt to FCF ratio of 1.46. This is in the better half of the industry: KFY outperforms 74.68% of its industry peers.
A Debt/Equity ratio of 0.22 indicates that KFY is not too dependend on debt financing.
KFY has a Debt to Equity ratio (0.22) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.46 | ||
| Altman-Z | 3.09 |
ROIC/WACC0.91
WACC8.96%
2.3 Liquidity
A Current Ratio of 2.07 indicates that KFY has no problem at all paying its short term obligations.
The Current ratio of KFY (2.07) is better than 77.22% of its industry peers.
KFY has a Quick Ratio of 2.07. This indicates that KFY is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of KFY (2.07) is better than 77.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.07 | ||
| Quick Ratio | 2.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.59% over the past year.
The Earnings Per Share has been growing slightly by 5.26% on average over the past years.
Looking at the last year, KFY shows a very negative growth in Revenue. The Revenue has decreased by -22.77% in the last year.
The Revenue has been growing slightly by 7.21% on average over the past years.
EPS 1Y (TTM)18.59%
EPS 3Y19.56%
EPS 5Y5.26%
EPS Q2Q%24.74%
Revenue 1Y (TTM)-22.77%
Revenue growth 3Y15.38%
Revenue growth 5Y7.21%
Sales Q2Q%-3.13%
3.2 Future
Based on estimates for the next years, KFY will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.86% on average per year.
Based on estimates for the next years, KFY will show a small growth in Revenue. The Revenue will grow by 2.99% on average per year.
EPS Next Y12.16%
EPS Next 2Y11.98%
EPS Next 3Y11.86%
EPS Next 5YN/A
Revenue Next Year-2.47%
Revenue Next 2Y1.39%
Revenue Next 3Y2.99%
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
Based on the Price/Earnings ratio of 13.64, the valuation of KFY can be described as correct.
KFY's Price/Earnings ratio is a bit cheaper when compared to the industry. KFY is cheaper than 73.42% 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 29.63.
KFY is valuated reasonably with a Price/Forward Earnings ratio of 11.97.
Based on the Price/Forward Earnings ratio, KFY is valued a bit cheaper than 78.48% of the companies in the same industry.
KFY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.64 | ||
| Fwd PE | 11.97 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KFY indicates a rather cheap valuation: KFY is cheaper than 83.54% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, KFY is valued cheaply inside the industry as 82.28% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.2 | ||
| EV/EBITDA | 7.84 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
KFY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.12
PEG (5Y)2.59
EPS Next 2Y11.98%
EPS Next 3Y11.86%
5. Dividend
5.1 Amount
KFY has a Yearly Dividend Yield of 2.25%. Purely for dividend investing, there may be better candidates out there.
KFY's Dividend Yield is rather good when compared to the industry average which is at 1.93. KFY pays more dividend than 89.87% of the companies in the same industry.
KFY's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
5.2 History
The dividend of KFY is nicely growing with an annual growth rate of 20.17%!
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 30.51% of its income as dividend. This is a sustainable payout ratio.
KFY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP30.51%
EPS Next 2Y11.98%
EPS Next 3Y11.86%
64.4
-1.43 (-2.17%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners100.65%
Inst Owner Change3.62%
Ins Owners1.02%
Ins Owner Change-1.56%
Market Cap3.32B
Analysts82.22
Price Target83.13 (29.08%)
Short Float %2.28%
Short Ratio3.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
Yearly Dividend1.04
Dividend Growth(5Y)20.17%
DP30.51%
Div Incr Years4
Div Non Decr Years9
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.67%
Min EPS beat(2)-1.15%
Max EPS beat(2)4.5%
EPS beat(4)3
Avg EPS beat(4)5.23%
Min EPS beat(4)-1.15%
Max EPS beat(4)10.99%
EPS beat(8)6
Avg EPS beat(8)4.72%
EPS beat(12)9
Avg EPS beat(12)4.5%
EPS beat(16)13
Avg EPS beat(16)12.44%
Revenue beat(2)1
Avg Revenue beat(2)0.31%
Min Revenue beat(2)-0.02%
Max Revenue beat(2)0.65%
Revenue beat(4)2
Avg Revenue beat(4)0.04%
Min Revenue beat(4)-0.86%
Max Revenue beat(4)0.65%
Revenue beat(8)6
Avg Revenue beat(8)0.88%
Revenue beat(12)9
Avg Revenue beat(12)1.75%
Revenue beat(16)13
Avg Revenue beat(16)3.67%
PT rev (1m)0%
PT rev (3m)2.84%
EPS NQ rev (1m)-2.25%
EPS NQ rev (3m)-1.23%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.2%
Revenue NQ rev (1m)-2.77%
Revenue NQ rev (3m)-6.36%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.64 | ||
| Fwd PE | 11.97 | ||
| P/S | 1.21 | ||
| P/FCF | 12.2 | ||
| P/OCF | 10.36 | ||
| P/B | 1.87 | ||
| P/tB | 4.19 | ||
| EV/EBITDA | 7.84 |
EPS(TTM)4.72
EY7.33%
EPS(NY)5.38
Fwd EY8.35%
FCF(TTM)5.28
FCFY8.2%
OCF(TTM)6.22
OCFY9.65%
SpS53.15
BVpS34.47
TBVpS15.37
PEG (NY)1.12
PEG (5Y)2.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.91% | ||
| ROE | 13.71% | ||
| ROCE | 10.91% | ||
| ROIC | 8.15% | ||
| ROICexc | 11.05% | ||
| ROICexgc | 21.05% | ||
| OM | 11.17% | ||
| PM (TTM) | 8.89% | ||
| GM | 88.72% | ||
| FCFM | 9.93% |
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 Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.46 | ||
| Debt/EBITDA | 1.03 | ||
| Cap/Depr | 61.55% | ||
| Cap/Sales | 1.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 83.29% | ||
| Profit Quality | 111.7% | ||
| Current Ratio | 2.07 | ||
| Quick Ratio | 2.07 | ||
| Altman-Z | 3.09 |
F-Score8
WACC8.96%
ROIC/WACC0.91
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)18.59%
EPS 3Y19.56%
EPS 5Y5.26%
EPS Q2Q%24.74%
EPS Next Y12.16%
EPS Next 2Y11.98%
EPS Next 3Y11.86%
EPS Next 5YN/A
Revenue 1Y (TTM)-22.77%
Revenue growth 3Y15.38%
Revenue growth 5Y7.21%
Sales Q2Q%-3.13%
Revenue Next Year-2.47%
Revenue Next 2Y1.39%
Revenue Next 3Y2.99%
Revenue Next 5YN/A
EBIT growth 1Y-8.78%
EBIT growth 3Y15.74%
EBIT growth 5Y15.48%
EBIT Next Year51.8%
EBIT Next 3Y21.12%
EBIT Next 5YN/A
FCF growth 1Y-28.01%
FCF growth 3Y1.27%
FCF growth 5Y1.53%
OCF growth 1Y-28.02%
OCF growth 3Y4.14%
OCF growth 5Y1.87%