KORN FERRY (KFY) Stock Fundamental Analysis
NYSE:KFY - New York Stock Exchange, Inc. - US5006432000 - Common Stock - Currency: USD
Overall KFY gets a fundamental rating of 6 out of 10. We evaluated KFY against 82 industry peers in the Professional Services industry. Both the health and profitability get an excellent rating, making KFY a very profitable company, without any liquidiy or solvency issues. KFY has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
KFY had positive earnings in the past year.
In the past year KFY had a positive cash flow from operations.
Each year in the past 5 years KFY has been profitable.
Of the past 5 years KFY 4 years 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.
KFY has a Return On Equity of 13.58%. This is in the better half of the industry: KFY outperforms 60.98% of its industry peers.
With a decent Return On Invested Capital value of 8.92%, KFY is doing good in the industry, outperforming 65.85% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital 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 80.49% of its industry peers.
In the last couple of years the Profit Margin of KFY has grown nicely.
KFY has a better Operating Margin (12.26%) than 82.93% of its industry peers.
In the last couple of years the Operating Margin of KFY has remained more or less at the same level.
With an excellent Gross Margin value of 88.65%, KFY belongs to the best of the industry, outperforming 97.56% 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 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
Compared to 5 years ago, KFY has less shares outstanding
Compared to 1 year ago, KFY has an improved debt to assets ratio.
2.2 Solvency
KFY has an Altman-Z score of 3.12. This indicates that KFY is financially healthy and has little risk of bankruptcy at the moment.
KFY's Altman-Z score of 3.12 is in line compared to the rest of the industry. KFY outperforms 57.32% of its industry peers.
The Debt to FCF ratio of KFY is 1.26, which is an excellent value as it means it would take KFY, only 1.26 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.26, KFY is in the better half of the industry, outperforming 76.83% of the companies in the same industry.
KFY has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.22, KFY perfoms like the industry average, outperforming 59.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.26 | ||
| Altman-Z | 3.12 |
ROIC/WACC1.03
WACC8.69%
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 70.73% 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.
With a decent Quick ratio value of 1.90, KFY is doing good in the industry, outperforming 70.73% 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 14.22%, which is quite good.
KFY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.91% yearly.
The Revenue has decreased by -1.23% in the past year.
The Revenue has been growing slightly by 6.91% on average over the past years.
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
KFY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.78% yearly.
The Revenue is expected to grow by 4.55% on average over the next years.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
The Price/Earnings ratio is 14.97, which indicates a correct valuation of KFY.
Compared to the rest of the industry, the Price/Earnings ratio of KFY indicates a somewhat cheap valuation: KFY is cheaper than 75.61% of the companies listed in the same industry.
KFY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 14.48 indicates a correct valuation of KFY.
70.73% of the companies in the same industry are more expensive than KFY, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.74. KFY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.97 | ||
| Fwd PE | 14.48 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KFY is valued cheaper than 84.15% of the companies in the same industry.
KFY's Price/Free Cash Flow ratio is rather cheap when compared to the industry. KFY is cheaper than 80.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.98 | ||
| EV/EBITDA | 8 |
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.
The decent profitability rating of KFY may justify a higher PE ratio.
PEG (NY)4.42
PEG (5Y)1.37
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.
Compared to an average industry Dividend Yield of 2.06, KFY pays a better dividend. On top of this KFY pays more dividend than 89.02% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, KFY has a dividend comparable with the average S&P500 company.
| 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 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.
KFY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP31.25%
EPS Next 2Y11.15%
EPS Next 3Y9.78%
73.37
-0.61 (-0.82%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners98.98%
Inst Owner Change-0.02%
Ins Owners1.02%
Ins Owner Change-2.77%
Market Cap3.79B
Analysts82.22
Price Target85.43 (16.44%)
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 | 14.97 | ||
| Fwd PE | 14.48 | ||
| P/S | 1.38 | ||
| P/FCF | 11.98 | ||
| P/OCF | 10.23 | ||
| P/B | 2.11 | ||
| P/tB | 4.89 | ||
| EV/EBITDA | 8 |
EPS(TTM)4.9
EY6.68%
EPS(NY)5.07
Fwd EY6.9%
FCF(TTM)6.12
FCFY8.35%
OCF(TTM)7.17
OCFY9.77%
SpS53.07
BVpS34.71
TBVpS15
PEG (NY)4.42
PEG (5Y)1.37
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 | 3.12 |
F-Score7
WACC8.69%
ROIC/WACC1.03
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