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Franklin Covey Company (FC)
NYSE:FC
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Franklin Covey Company
(NYSE:FC)
Rating:70Outperform
Price Target:
$24.50
▲(10.86%Upside)
Positive Factors
Analyst Recommendation
The OUTPERFORM rating is maintained with a 12-month price target of $35, representing nearly 50% upside from current levels.
Revenue Growth
Franklin Covey's new go-to-market North American Enterprise Division sales force transformation is complete and tracking ahead of expectations, which is expected to drive significant acceleration of the company's overall revenue growth.
Stock Valuation
Franklin Covey's shares are trading at a discount compared to its Ed Tech peer group, suggesting a potential value opportunity.
Negative Factors
Government and Business Environment
Management reduced its full-year guidance for FY/25 due to the expected impact of government actions and the current business environment.
Guidance Reduction
Full-year guidance was reduced due to continued macro uncertainty impacting clients' decision-making and timing risk for delivery of services.
Revenue Decline
Revenue decreased 2.8% to $59.6 million, below the FactSet consensus of $62.7 million.
Franklin Covey Company (FC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$287.03M
Dividend YieldN/A
Average Volume (3M)104.26K
Price to Earnings (P/E)27.9
Beta (1Y)0.89
Revenue Growth-0.40%
EPS Growth-40.98%
CountryUS
Employees1,084
SectorIndustrials
Sector Strength86
IndustryConsulting Services
Share Statistics
EPS (TTM)-0.11
Shares Outstanding12,987,725
10 Day Avg. Volume178,188
30 Day Avg. Volume104,258
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)7.40
Price to Sales (P/S)0.00
P/FCF Ratio26.23
Enterprise Value/Market Cap2.22
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit2.92
Enterprise Value/Ebitda3.99
Forecast
1Y Price Target
$33.00Price Target Upside49.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Franklin Covey Company Business Overview & Revenue Model
Company DescriptionFranklin Covey Co. provides training and consulting services in the areas of execution, sales performance, productivity, customer loyalty, and educational improvement for organizations and individuals worldwide. The company operates through three segments: Direct Offices, International Licensees, and Education Practice. It also provides a suite of individual-effectiveness and leadership-development training and products. The company was incorporated in 1983 and is headquartered in Salt Lake City, Utah.
How the Company Makes MoneyFranklin Covey Company makes money primarily through the sale of its training and consulting services, as well as through the licensing of its content and intellectual property. The company generates revenue by offering workshops, seminars, and digital learning solutions to organizations across various industries. Key revenue streams include corporate training programs, public workshops, and online courses. Franklin Covey also partners with educational institutions and other organizations to expand its reach and impact, which contributes to its earnings. The company's ability to customize its solutions to meet specific client needs is a significant factor in its revenue generation.
Franklin Covey Company Earnings Call Summary
Earnings Call Date:Jul 02, 2025
(Q3-2025)
| % Change Since: -8.56%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook. While there are positive developments in cost reduction, new client wins, and education segment growth, these are overshadowed by revenue declines, increased operating expenses, and revised downwards fiscal guidance due to macroeconomic uncertainties. The company is taking steps to adapt, but challenges remain significant.Q3-2025 Updates
Positive Updates
Revenue and Adjusted EBITDA Performance
Revenue in the third quarter was $67.1 million, and adjusted EBITDA was $7.3 million, which exceeded expectations. The adjusted EBITDA was higher than the expected range of $4 million to $6.5 million.
Cost Reduction Initiatives
Successful implementation of cost reduction initiatives that are expected to result in meaningful year-over-year increases in adjusted EBITDA next year. The cost savings will annualize into $8 million in fiscal year 2026.
Enterprise North America Go-to-Market Strategy
Strong traction in the implementation of the new go-to-market strategy in the Enterprise North America business, leading to an increase in new client wins and expansion within existing client organizations.
Education Business Strength
The Education segment showed strength with a 13% increase in subscription revenue and a 21% increase in deferred revenue balance, despite uncertainties such as the ESSER funds expiration.
Client Retention and Multiyear Contracts
The majority of clients continue to renew subscriptions. Multiyear All Access Pass contracts increased to 58% from 55% last year, and the revenue under multiyear contracts increased to 62%.
Negative Updates
Revenue Decline
Total revenue was down 9% from the prior year quarter and down 4% year-to-date, due to cancellations of U.S. federal government contracts, geopolitical trade tensions, and macroeconomic uncertainty.
Reduced Fiscal Year 2025 Outlook
The company revised its fiscal year 2025 revenue guidance to a range of $265 million to $275 million, down from previous expectations, due to uncertainty in client decision-making and timing risk for service delivery.
Challenges in International Operations
International direct operations revenue decreased by $1 million, primarily due to decreased business in Asia and the U.K. Adjusted EBITDA for international direct operations also decreased.
Increased Operating Expenses
Operating expenses increased by $5.7 million compared to the prior year, due to $4 million in restructuring charges and increased costs associated with the go-to-market strategy in North America.
Company Guidance
During the third quarter of fiscal year 2025, Franklin Covey reported revenue of $67.1 million, aligning with expectations, and adjusted EBITDA of $7.3 million, which exceeded the anticipated range of $4 million to $6.5 million. Despite macroeconomic challenges, including government actions affecting revenue, the company implemented cost reductions to maintain profitability, leading to a revision in annual revenue guidance to a range of $265 million to $275 million. The adjusted EBITDA guidance was widened to $28 million to $33 million. The company highlighted strong performance in new client wins and expansions, with a focus on growing the Enterprise and Education divisions. Notably, the Education division saw a 13% increase in subscription revenue, while the Enterprise division experienced headwinds from government-related actions. Franklin Covey emphasized strategic investments and cost management as key factors for anticipated future growth.Franklin Covey Company Financial Statement Overview
Summary
Franklin Covey Company shows stable financial performance with consistent revenue growth and strong profitability margins. The balance sheet is robust with low leverage, and cash flow management is positive. However, recent fluctuations in revenue and free cash flow pose potential risks.Income Statement
Franklin Covey Company demonstrates a stable financial performance with consistent revenue growth from 2021 to 2025. The Gross Profit Margin remains strong, averaging around 75%, while the Net Profit Margin shows improvement, reaching 6.2% in TTM. However, there is a slight decline in total revenue in the latest TTM period, indicating a potential risk if this trend continues.75
Positive
Balance Sheet
The company's balance sheet is robust with a low Debt-to-Equity Ratio of 0.02 in TTM, indicating low leverage. The Equity Ratio is healthy at 32.8%, showcasing a stable financial structure. Return on Equity has improved, reflecting efficient management of shareholder funds despite a decrease in stockholders' equity.80
Positive
Cash Flow
The cash flow statement reveals strong operational cash generation with a healthy Operating Cash Flow to Net Income Ratio. Free Cash Flow has shown volatility, decreasing in the most recent TTM period, which may impact financial flexibility. The consistent operating cash flow is a positive indicator of the company's ability to sustain operations.70
Positive
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 286.19M | 287.23M | 280.52M | 262.84M | 224.17M | 198.46M |
| Gross Profit | 218.35M | 221.07M | 213.49M | 201.91M | 172.90M | 145.37M |
| EBITDA | 34.53M | 43.08M | 39.98M | 38.17M | 23.82M | 18.66M |
| Net Income | 17.78M | 23.40M | 17.78M | 18.43M | 13.62M | -9.44M |
Balance Sheet | ||||||
| Total Assets | 221.34M | 261.54M | 245.92M | 259.15M | 249.65M | 205.44M |
| Cash, Cash Equivalents and Short-Term Investments | 40.39M | 48.66M | 38.23M | 60.52M | 47.42M | 27.14M |
| Total Debt | 4.15M | 6.03M | 15.33M | 24.26M | 32.86M | 36.65M |
| Total Liabilities | 148.81M | 178.40M | 167.26M | 176.34M | 169.79M | 145.98M |
| Stockholders Equity | 72.53M | 83.14M | 78.65M | 82.81M | 79.86M | 59.45M |
Cash Flow | ||||||
| Free Cash Flow | 33.78M | 56.56M | 22.19M | 46.92M | 42.07M | 18.30M |
| Operating Cash Flow | 42.82M | 60.26M | 35.74M | 52.25M | 46.18M | 27.56M |
| Investing Cash Flow | -10.80M | -11.31M | -13.55M | -5.33M | -14.31M | -11.87M |
| Financing Cash Flow | -32.59M | -38.66M | -44.18M | -32.67M | -11.48M | -16.56M |
Franklin Covey Company Technical Analysis
Negative
22.10
Price Trends
22.44
Negative
25.46
Negative
31.69
Negative
Market Momentum
0.12
Negative
43.89
Neutral
61.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FC, the sentiment is Negative. The current price of 22.1 is below the 20-day moving average (MA) of 22.89, below the 50-day MA of 22.44, and below the 200-day MA of 31.69, indicating a bearish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 43.89 is Neutral, neither overbought nor oversold. The STOCH value of 61.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FC.
Franklin Covey Company Risk Analysis
Franklin Covey Company disclosed 29 risk factors in its most recent earnings report. Franklin Covey Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Franklin Covey Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.34B | 26.50 | 23.18% | 1.00% | 8.49% | 21.06% | |
72 Outperform | $1.63B | 15.17 | 11.64% | 0.63% | 1.95% | 17.98% | |
70 Outperform | $287.03M | 27.95 | 15.47% | ― | -0.40% | -40.98% | |
68 Neutral | £2.99B | 10.39 | 7.71% | 3.37% | 3.01% | -10.61% | |
57 Neutral | $53.28M | 0.71 | 112.00% | ― | 34.17% | ― | |
50 Neutral | $199.41M | ― | -31.18% | 4.64% | -16.27% | -589.83% | |
46 Neutral | $206.45M | ― | -45.64% | ― | -9.61% | -18170.36% |
* Industrials Sector Average
Performance Comparison
FC
Franklin Covey Company
22.10
-16.81
-43.20%
CRAI
Cra International
196.24
26.03
15.29%
FORR
Forrester Research
10.83
-6.27
-36.67%
ICFI
Icf International
88.43
-43.65
-33.05%
RGP
Resources Connection
6.03
-3.49
-36.66%
AERT
Aeries Technology
1.13
-0.67
-37.22%
Franklin Covey Company Corporate Events
Business Operations and StrategyFinancial Disclosures
Franklin Covey Reports Q3 2025 Financial Results
Neutral
Jul 2, 2025
On June 18, 2025, Franklin Covey Company announced its financial results for the third quarter of fiscal 2025, ended May 31, 2025. The company reported consolidated revenue of $67.1 million, a decrease from the previous year’s $73.4 million. The Enterprise Division faced revenue declines due to macroeconomic uncertainties and geopolitical trade tensions. Despite a net loss of $1.4 million, the company exceeded its adjusted EBITDA guidance with $7.3 million. Franklin Covey maintained strong liquidity with over $95 million, including $33.7 million in cash, and updated its fiscal 2025 guidance, projecting total revenue between $265 million and $275 million. The company remains optimistic about future growth, with increased client retention and expansion in its subscription services.
The most recent analyst rating on (FC) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Franklin Covey Company stock, see the FC Stock Forecast page.
Executive/Board Changes
Franklin Covey Announces New CFO and Leadership Changes
Neutral
Apr 21, 2025
On April 16, 2025, Franklin Covey Company announced changes in its executive financial leadership. Stephen D. Young will retire as Chief Financial Officer effective May 1, 2025, after 24 years of service, transitioning to a senior advisor role until August 31, 2025. Jessica Betjemann will succeed him as CFO, bringing over 30 years of financial experience, including her recent role as CFO of Gogo, Inc. Additionally, A. Derek Hatch will be appointed as Chief Accounting Officer, Controller, and Treasurer, effective the same date, continuing his long tenure with the company.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.