KORN FERRY (KFY) Stock Fundamental Analysis
NYSE:KFY - New York Stock Exchange, Inc. - US5006432000 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to KFY. KFY was compared to 83 industry peers in the Professional Services industry. While KFY has a great profitability rating, there are some minor concerns on its financial health. KFY scores decently on growth, while it is valued quite cheap. This could make an interesting combination. 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
In the past year KFY was profitable.
In the past year KFY had a positive cash flow from operations.
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
KFY's Return On Assets of 6.67% is fine compared to the rest of the industry. KFY outperforms 66.27% of its industry peers.
The Return On Equity of KFY (13.58%) is better than 62.65% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.88%, KFY is in the better half of the industry, outperforming 63.86% 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 13.57%.
| 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
Looking at the Profit Margin, with a value of 8.88%, KFY is in the better half of the industry, outperforming 79.52% of the companies in the same industry.
In the last couple of years the Profit Margin of KFY has grown nicely.
KFY's Operating Margin of 12.26% is amongst the best of the industry. KFY outperforms 81.93% of its industry peers.
KFY's Operating Margin has improved in the last couple of years.
KFY has a Gross Margin of 88.65%. This is amongst the best in the industry. KFY outperforms 95.18% of its industry peers.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), KFY is creating some value.
The number of shares outstanding for KFY has been reduced compared to 1 year ago.
Compared to 5 years ago, KFY has less shares outstanding
KFY has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.91 indicates that KFY is not a great score, but indicates only limited risk for bankruptcy at the moment.
KFY has a Altman-Z score (2.91) which is in line with 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.
The Debt to FCF ratio of KFY (1.26) is better than 74.70% 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.
KFY has a Debt to Equity ratio of 0.22. This is comparable to the rest of the industry: KFY outperforms 55.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.26 | ||
| Altman-Z | 2.91 |
ROIC/WACC1.04
WACC8.54%
2.3 Liquidity
A Current Ratio of 1.90 indicates that KFY should not have too much problems paying its short term obligations.
KFY has a better Current ratio (1.90) than 75.90% of its industry peers.
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 75.90% of the companies in the same industry.
| 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 19.80% over the past year.
KFY shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.26% yearly.
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
The Earnings Per Share is expected to grow by 12.24% on average over the next years. This is quite good.
The Revenue is expected to grow by 2.61% on average over the next years.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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 12.55, which indicates a correct valuation of KFY.
KFY's Price/Earnings ratio is a bit cheaper when compared to the industry. KFY is cheaper than 74.70% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, KFY is valued rather cheaply.
KFY is valuated reasonably with a Price/Forward Earnings ratio of 11.96.
78.31% 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 21.08. KFY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.55 | ||
| Fwd PE | 11.96 |
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 86.75% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, KFY is valued cheaper than 90.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.91 | ||
| EV/EBITDA | 6.43 |
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.
KFY's earnings are expected to grow with 12.24% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.9
PEG (5Y)2.39
EPS Next 2Y8.8%
EPS Next 3Y12.24%
5. Dividend
5.1 Amount
KFY has a Yearly Dividend Yield of 3.16%.
Compared to an average industry Dividend Yield of 2.41, KFY pays a better dividend. On top of this KFY pays more dividend than 92.77% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, KFY pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
5.2 History
The dividend of KFY is nicely growing with an annual growth rate of 20.17%!
KFY has been paying a dividend for at least 10 years, so it has 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
31.25% of the earnings are spent on dividend by KFY. This is a low number and 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%
60.72
-0.94 (-1.52%)
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 Cap3.14B
Analysts82.22
Price Target82.88 (36.5%)
Short Float %2.65%
Short Ratio3.66
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 | 12.55 | ||
| Fwd PE | 11.96 | ||
| P/S | 1.14 | ||
| P/FCF | 9.91 | ||
| P/OCF | 8.47 | ||
| P/B | 1.75 | ||
| P/tB | 4.05 | ||
| EV/EBITDA | 6.43 |
EPS(TTM)4.84
EY7.97%
EPS(NY)5.08
Fwd EY8.36%
FCF(TTM)6.12
FCFY10.09%
OCF(TTM)7.17
OCFY11.81%
SpS53.07
BVpS34.71
TBVpS15
PEG (NY)0.9
PEG (5Y)2.39
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 | 2.91 |
F-Score8
WACC8.54%
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%