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 decent growth rate and is not valued too expensively.
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.
In the past 5 years KFY has always been profitable.
KFY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
KFY has a Return On Assets of 6.29%. This is in the better half of the industry: KFY outperforms 67.07% of its industry peers.
The Return On Equity of KFY (13.01%) is better than 60.98% of its industry peers.
The Return On Invested Capital of KFY (9.18%) is better than 67.07% of its industry peers.
KFY had an Average Return On Invested Capital over the past 3 years of 9.27%. This is below the industry average of 12.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 13.01% | ||
| ROIC | 9.18% |
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
KFY has a better Profit Margin (8.79%) than 80.49% of its industry peers.
KFY's Profit Margin has improved in the last couple of years.
KFY has a Operating Margin of 12.85%. This is amongst the best in the industry. KFY outperforms 82.93% of its industry peers.
KFY's Operating Margin has improved in the last couple of years.
The Gross Margin of KFY (88.55%) is better than 97.56% of its industry peers.
KFY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.85% | ||
| PM (TTM) | 8.79% | ||
| GM | 88.55% |
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
Compared to 5 years ago, KFY has less shares outstanding
The debt/assets ratio for KFY has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.99 indicates that KFY is not in any danger for bankruptcy at the moment.
KFY has a Altman-Z score (2.99) which is in line with its industry peers.
KFY has a debt to FCF ratio of 1.33. This is a very positive value and a sign of high solvency as it would only need 1.33 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.33, 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 0.21. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.21, KFY perfoms like the industry average, outperforming 59.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.33 | ||
| Altman-Z | 2.99 |
ROIC/WACC1.03
WACC8.92%
2.3 Liquidity
A Current Ratio of 1.83 indicates that KFY should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.83, KFY is in the better half of the industry, outperforming 69.51% of the companies in the same industry.
KFY has a Quick Ratio of 1.83. This is a normal value and indicates that KFY is financially healthy and should not expect problems in meeting its short term obligations.
KFY has a better Quick ratio (1.83) than 69.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.83 | ||
| Quick Ratio | 1.83 |
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.
The Earnings Per Share has been growing by 10.91% on average over the past years. This is quite good.
Looking at the last year, KFY shows a very negative growth in Revenue. The Revenue has decreased by -21.15% in the last 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)-21.15%
Revenue growth 3Y1.46%
Revenue growth 5Y6.91%
Sales Q2Q%3.08%
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 9.79% yearly.
Based on estimates for the next years, KFY will show a small growth in Revenue. The Revenue will grow by 4.55% on average per year.
EPS Next Y8.21%
EPS Next 2Y9.51%
EPS Next 3Y9.79%
EPS Next 5YN/A
Revenue Next Year2.96%
Revenue Next 2Y3.87%
Revenue Next 3Y4.55%
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
The Price/Earnings ratio is 15.01, which indicates a correct valuation of KFY.
69.51% of the companies in the same industry are more expensive than KFY, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of KFY to the average of the S&P500 Index (27.41), we can say KFY is valued slightly cheaper.
A Price/Forward Earnings ratio of 13.87 indicates a correct valuation of KFY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KFY indicates a somewhat cheap valuation: KFY is cheaper than 70.73% of the companies listed in the same industry.
KFY is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.01 | ||
| Fwd PE | 13.87 |
4.2 Price Multiples
87.80% of the companies in the same industry are more expensive than KFY, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, KFY is valued a bit cheaper than 75.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.65 | ||
| EV/EBITDA | 7.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
KFY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.83
PEG (5Y)1.38
EPS Next 2Y9.51%
EPS Next 3Y9.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.57%, 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 90.24% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, KFY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
5.2 History
On average, the dividend of KFY grows each year by 31.50%, which is quite nice.
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)31.5%
Div Incr Years4
Div Non Decr Years9
5.3 Sustainability
KFY pays out 34.44% 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.
DP34.44%
EPS Next 2Y9.51%
EPS Next 3Y9.79%
73.57
-1.23 (-1.64%)
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-2.87%
Market Cap3.82B
Analysts82.22
Price Target85.43 (16.12%)
Short Float %3.03%
Short Ratio3.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
Yearly Dividend1.62
Dividend Growth(5Y)31.5%
DP34.44%
Div Incr Years4
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.09%
Min EPS beat(2)3.72%
Max EPS beat(2)4.45%
EPS beat(4)3
Avg EPS beat(4)2.88%
Min EPS beat(4)-1.15%
Max EPS beat(4)4.5%
EPS beat(8)7
Avg EPS beat(8)4.63%
EPS beat(12)9
Avg EPS beat(12)3.7%
EPS beat(16)13
Avg EPS beat(16)6.19%
Revenue beat(2)2
Avg Revenue beat(2)1.99%
Min Revenue beat(2)1.79%
Max Revenue beat(2)2.19%
Revenue beat(4)3
Avg Revenue beat(4)0.85%
Min Revenue beat(4)-1.14%
Max Revenue beat(4)2.19%
Revenue beat(8)6
Avg Revenue beat(8)0.68%
Revenue beat(12)9
Avg Revenue beat(12)1.17%
Revenue beat(16)13
Avg Revenue beat(16)2.31%
PT rev (1m)6.69%
PT rev (3m)3.08%
EPS NQ rev (1m)4.34%
EPS NQ rev (3m)1.3%
EPS NY rev (1m)4.42%
EPS NY rev (3m)-1.24%
Revenue NQ rev (1m)1.21%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.82%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.01 | ||
| Fwd PE | 13.87 | ||
| P/S | 1.38 | ||
| P/FCF | 12.65 | ||
| P/OCF | 10.48 | ||
| P/B | 2.05 | ||
| P/tB | 4.51 | ||
| EV/EBITDA | 7.22 |
EPS(TTM)4.9
EY6.66%
EPS(NY)5.3
Fwd EY7.21%
FCF(TTM)5.81
FCFY7.9%
OCF(TTM)7.02
OCFY9.54%
SpS53.18
BVpS35.95
TBVpS16.32
PEG (NY)1.83
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 13.01% | ||
| ROCE | 12.21% | ||
| ROIC | 9.18% | ||
| ROICexc | 14.32% | ||
| ROICexgc | 31.63% | ||
| OM | 12.85% | ||
| PM (TTM) | 8.79% | ||
| GM | 88.55% | ||
| FCFM | 10.93% |
ROA(3y)5.51%
ROA(5y)5.88%
ROE(3y)11.68%
ROE(5y)12.77%
ROIC(3y)9.27%
ROIC(5y)9.69%
ROICexc(3y)14.32%
ROICexc(5y)15.61%
ROICexgc(3y)33.58%
ROICexgc(5y)35.79%
ROCE(3y)12.34%
ROCE(5y)12.9%
ROICexcg growth 3Y-17.99%
ROICexcg growth 5Y3.52%
ROICexc growth 3Y-16.94%
ROICexc growth 5Y2.44%
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%
F-Score8
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.33 | ||
| Debt/EBITDA | 0.92 | ||
| Cap/Depr | 77.83% | ||
| Cap/Sales | 2.26% | ||
| Interest Coverage | 14.06 | ||
| Cash Conversion | 83.73% | ||
| Profit Quality | 124.32% | ||
| Current Ratio | 1.83 | ||
| Quick Ratio | 1.83 | ||
| Altman-Z | 2.99 |
F-Score8
WACC8.92%
ROIC/WACC1.03
Cap/Depr(3y)83.88%
Cap/Depr(5y)75.95%
Cap/Sales(3y)2.23%
Cap/Sales(5y)2.05%
Profit Quality(3y)131.86%
Profit Quality(5y)146.92%
High Growth Momentum
Growth
EPS 1Y (TTM)14.22%
EPS 3Y-7.74%
EPS 5Y10.91%
EPS Q2Q%4.76%
EPS Next Y8.21%
EPS Next 2Y9.51%
EPS Next 3Y9.79%
EPS Next 5YN/A
Revenue 1Y (TTM)-21.15%
Revenue growth 3Y1.46%
Revenue growth 5Y6.91%
Sales Q2Q%3.08%
Revenue Next Year2.96%
Revenue Next 2Y3.87%
Revenue Next 3Y4.55%
Revenue Next 5YN/A
EBIT growth 1Y2.18%
EBIT growth 3Y-9.61%
EBIT growth 5Y8.64%
EBIT Next Year34.33%
EBIT Next 3Y17.27%
EBIT Next 5YN/A
FCF growth 1Y31.93%
FCF growth 3Y-12.61%
FCF growth 5Y9.16%
OCF growth 1Y28.31%
OCF growth 3Y-10.11%
OCF growth 5Y9.05%