KORN FERRY (KFY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:KFY - US5006432000 - Common Stock
66.77 USD
+0.42 (+0.63%)
Taking everything into account, KFY scores 7 out of 10 in our fundamental rating. KFY was compared to 87 industry peers in the Professional Services industry. KFY has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. A decent growth rate in combination with a cheap valuation! Better keep an eye on KFY. Finally KFY also has an excellent dividend rating. These ratings would make KFY suitable 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
- KFY has a Return On Assets of 6.94%. This is in the better half of the industry: KFY outperforms 68.97% of its industry peers.
- The Return On Equity of KFY (13.30%) is better than 63.22% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 9.51%, KFY is in the better half of the industry, outperforming 67.82% 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 11.85%.
- The last Return On Invested Capital (9.51%) for KFY is above the 3 year average (9.27%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.94% | ||
| ROE | 13.3% | ||
| ROIC | 9.51% |
ROA(3y)5.51%
ROA(5y)5.88%
ROE(3y)11.68%
ROE(5y)12.77%
ROIC(3y)9.27%
ROIC(5y)9.69%
1.3 Margins
- The Profit Margin of KFY (9.10%) is better than 75.86% of its industry peers.
- In the last couple of years the Profit Margin of KFY has grown nicely.
- The Operating Margin of KFY (13.24%) is better than 75.86% of its industry peers.
- In the last couple of years the Operating Margin of KFY has grown nicely.
- With an excellent Gross Margin value of 88.04%, KFY belongs to the best of the industry, outperforming 97.70% 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 | 13.24% | ||
| PM (TTM) | 9.1% | ||
| GM | 88.04% |
OM growth 3Y-10.91%
OM growth 5Y1.62%
PM growth 3Y-10.01%
PM growth 5Y10.87%
GM growth 3Y-2.33%
GM growth 5Y-1.06%
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.
- Compared to 1 year ago, KFY has less shares outstanding
- 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
- KFY has an Altman-Z score of 3.18. This indicates that KFY is financially healthy and has little risk of bankruptcy at the moment.
- KFY has a better Altman-Z score (3.18) than 60.92% of its industry peers.
- KFY has a debt to FCF ratio of 1.46. This is a very positive value and a sign of high solvency as it would only need 1.46 years to pay back of all of its debts.
- KFY's Debt to FCF ratio of 1.46 is fine compared to the rest of the industry. KFY outperforms 74.71% of its industry peers.
- KFY has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.20, KFY is in line with its industry, outperforming 59.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.46 | ||
| Altman-Z | 3.18 |
ROIC/WACC1.13
WACC8.45%
2.3 Liquidity
- KFY has a Current Ratio of 2.14. This indicates that KFY is financially healthy and has no problem in meeting its short term obligations.
- KFY has a Current ratio of 2.14. This is in the better half of the industry: KFY outperforms 79.31% of its industry peers.
- KFY has a Quick Ratio of 2.14. This indicates that KFY is financially healthy and has no problem in meeting its short term obligations.
- With a decent Quick ratio value of 2.14, KFY is doing good in the industry, outperforming 79.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.14 | ||
| Quick Ratio | 2.14 |
3. Growth
3.1 Past
- KFY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.11%, which is quite good.
- The Earnings Per Share has been growing by 10.91% on average over the past years. This is quite good.
- KFY shows a small growth in Revenue. In the last year, the Revenue has grown by 3.65%.
- KFY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.91% yearly.
EPS 1Y (TTM)9.11%
EPS 3Y-7.74%
EPS 5Y10.91%
EPS Q2Q%9.92%
Revenue 1Y (TTM)3.65%
Revenue growth 3Y1.46%
Revenue growth 5Y6.91%
Sales Q2Q%7.02%
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 9.62% on average per year.
- The Revenue is expected to grow by 4.87% on average over the next years.
EPS Next Y8.01%
EPS Next 2Y8.7%
EPS Next 3Y9.62%
EPS Next 5YN/A
Revenue Next Year5.41%
Revenue Next 2Y4.78%
Revenue Next 3Y4.87%
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 12.97, the valuation of KFY can be described as correct.
- Based on the Price/Earnings ratio, KFY is valued cheaply inside the industry as 80.46% of the companies are valued more expensively.
- KFY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
- With a Price/Forward Earnings ratio of 11.53, the valuation of KFY can be described as very reasonable.
- KFY's Price/Forward Earnings ratio is rather cheap when compared to the industry. KFY is cheaper than 81.61% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. KFY is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.97 | ||
| Fwd PE | 11.53 |
4.2 Price Multiples
- KFY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. KFY is cheaper than 87.36% of the companies in the same industry.
- KFY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. KFY is cheaper than 79.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.83 | ||
| EV/EBITDA | 6.43 |
4.3 Compensation for Growth
- KFY's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of KFY may justify a higher PE ratio.
PEG (NY)1.62
PEG (5Y)1.19
EPS Next 2Y8.7%
EPS Next 3Y9.62%
5. Dividend
5.1 Amount
- KFY has a Yearly Dividend Yield of 2.79%.
- Compared to an average industry Dividend Yield of 1.44, KFY pays a better dividend. On top of this KFY pays more dividend than 87.36% of the companies listed in the same industry.
- KFY's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
- On average, the dividend of KFY grows each year by 31.50%, which is quite nice.
- KFY has paid a dividend for at least 10 years, which is 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)31.5%
Div Incr Years4
Div Non Decr Years9
5.3 Sustainability
- KFY pays out 37.03% 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.
DP37.03%
EPS Next 2Y8.7%
EPS Next 3Y9.62%
KORN FERRY / KFY FAQ
Can you provide the ChartMill fundamental rating for KORN FERRY?
ChartMill assigns a fundamental rating of 7 / 10 to KFY.
What is the valuation status for KFY stock?
ChartMill assigns a valuation rating of 7 / 10 to KORN FERRY (KFY). This can be considered as Undervalued.
Can you provide the profitability details for KORN FERRY?
KORN FERRY (KFY) has a profitability rating of 7 / 10.
What is the financial health of KORN FERRY (KFY) stock?
The financial health rating of KORN FERRY (KFY) is 8 / 10.
Can you provide the expected EPS growth for KFY stock?
The Earnings per Share (EPS) of KORN FERRY (KFY) is expected to grow by 8.01% in the next year.