tiprankstipranks
Trending News
More News >
Korn Ferry (KFY)
NYSE:KFY
Advertisement

Korn Ferry (KFY) AI Stock Analysis

Compare
282 Followers

Top Page

KFY

Korn Ferry

(NYSE:KFY)

Rating:78Outperform
Price Target:
$84.00
▲(14.22%Upside)
Korn Ferry's stock is bolstered by strong financial performance, particularly in profitability and cash flow generation. Technical indicators show bullish momentum, supporting a positive near-term outlook. The company's strategic initiatives in digital and executive search are driving growth, despite economic challenges. Reasonable valuation and supportive corporate actions like dividend declarations enhance the stock's attractiveness.
Positive Factors
Business Strategy
Management has made investments in talent, product enhancements, and internal productivity tools that should pay dividends in the coming years.
Financial Performance
Korn Ferry’s fourth-quarter results beat consensus, and first-quarter guidance was slightly better than expected.
Growth Potential
There is potential for earnings and valuation upside in an eventual early-cycle growth environment, where P/E multiples typically trend higher.
Negative Factors
Consulting Segment
Softness in the consulting segment is likely to persist for at least another few quarters.
Revenue Guidance
First-quarter guidance reflects a 4% sequential revenue decline, worse than the 10-year average sequential drop of 2%.
Sales Cycle Challenges
Headwinds in the consulting and digital segments could persist due to lengthening sales cycles.

Korn Ferry (KFY) vs. SPDR S&P 500 ETF (SPY)

Korn Ferry Business Overview & Revenue Model

Company DescriptionKorn Ferry, together with its subsidiaries, provides organizational consulting services worldwide. It operates through four segments: Consulting, Digital, Executive Search, and Recruitment Process Outsourcing (RPO) & Professional Search. The company provides executive search services to recruit board level, chief executive, other senior executive, and general management talent of organizations. It also offers organizational strategy, assessment and succession, leadership and professional development, and total reward services. In addition, the company provides RPO, business project, professional search, and outsource recruiting solutions. Further, the company offers tech-enabled solutions that identify structures, roles, capabilities, and behaviors to drive businesses. It serves public and private companies, and middle market and emerging growth companies, as well as government and non-profit organizations. The company was formerly known as Korn/Ferry International and changed its name to Korn Ferry in January 2019. Korn Ferry was founded in 1969 and is based in Los Angeles, California.
How the Company Makes MoneyKorn Ferry generates revenue primarily through its consulting services, which are categorized into several key areas: executive search, recruitment process outsourcing (RPO), and professional search, where they help organizations find and place top-tier leadership and specialized talent; leadership and talent consulting, which includes providing strategic advice and solutions in leadership development, succession planning, and talent strategy; and rewards and benefits advisory, offering insights and guidance on compensation, benefits, and rewards programs. The company also earns income from its digital platform, Korn Ferry Advance, which offers career development tools and resources. Korn Ferry's partnerships with enterprises across various industries contribute significantly to its earnings, as do its investments in digital and data-driven solutions that enhance its consulting offerings.

Korn Ferry Earnings Call Summary

Earnings Call Date:Jun 18, 2025
(Q4-2025)
|
% Change Since: 10.87%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Positive
Korn Ferry demonstrated strong financial performance with growth in fee revenue, executive search, and digital business, despite a challenging economic environment marked by cost pressures and a tight labor market. The company's strategic focus on large-scale client engagements and digital solutions is paying off, though challenges remain in consulting growth and the broader economic climate.
Q4-2025 Updates
Positive Updates
Record Fee Revenue Growth
Fee revenue increased 4% year over year at constant currency, demonstrating the strength of Korn Ferry's business strategy in a challenging economic environment.
Executive Search Growth
Executive search grew for the fourth consecutive quarter, up 15% year over year at constant currency, indicating strong demand for leadership talent.
Significant Digital Business Growth
Digital subscription and license new business grew to 40% of the total digital new business, up from 37% in the prior year quarter, adding more stability and predictability to the fee revenue base.
Strong Adjusted EBITDA and Margin Increase
Adjusted EBITDA grew 8% to $121 million, with the adjusted EBITDA margin increasing by 70 basis points to 17%.
Robust Marquee and Diamond Accounts
Marquee and Diamond accounts remained strong, contributing 39% to consolidated fee revenue, highlighting the company's success with large, repeatable clients.
Continued Dividend Increases
Korn Ferry has raised its dividend six times in five years, reflecting a strong commitment to returning value to shareholders.
New Operating Metric for Future Revenue
The introduction of the 'Estimated Remaining Fees Under Existing Contracts' metric, totaling approximately $1.7 billion, up 12% year over year, demonstrates the effectiveness of Korn Ferry's diversification strategy.
Negative Updates
Flat Growth in Consulting
Consulting new business remained flat year over year, reflecting challenges in generating new engagements amid a cost-cutting environment.
Cost of Living Crisis Impact
The cost of living crisis in the U.S. is a significant challenge, affecting consumer purchasing power and adding pressure to companies' pricing strategies.
Labor Market Challenges
Low employee turnover and a tight labor market are creating challenges for growth, with Korn Ferry noting an all-time low turnover and economic growth constraints.
Company Guidance
During the Korn Ferry Fourth Quarter Fiscal Year 2025 Conference Call, the company reported strong financial results and provided guidance for the upcoming fiscal year. For the fourth quarter, Korn Ferry achieved a 4% year-over-year increase in consolidated fee revenue at constant currency, reaching $712 million. Adjusted EBITDA grew by 8% to $121 million, with a margin expansion of 70 basis points to 17%. The company's adjusted diluted earnings per share rose by 5% to $1.32. In terms of specific segments, Executive Search continued its positive trajectory with a 15% growth at constant currency, driven by demographic shifts and evolving leadership demands. The digital subscription and license business expanded to represent 40% of total digital new business, up from 37% in the prior year. Looking ahead, Korn Ferry expects first-quarter fiscal 2026 fee revenue to range between $675 million and $695 million, with an adjusted EBITDA margin of 16.8% to 17.2%, and adjusted diluted EPS of $1.18 to $1.26. The company remains focused on leveraging its extensive IP and data analytics, with 108 million assessments and rewards data on 28 million individuals, to drive client performance and maintain its growth trajectory.

Korn Ferry Financial Statement Overview

Summary
Korn Ferry demonstrates strong profitability with solid margins and effective cost management. A low debt-to-equity ratio and impressive return on equity highlight financial stability. Robust cash flow generation supports operational sustainability, despite a slight decline in revenue.
Income Statement
75
Positive
Korn Ferry demonstrates strong profitability with a healthy net profit margin of 8.9% and a robust EBIT margin of 12.5% for the latest year. Although the revenue has slightly declined by 1.2% from the previous year, the company shows effective cost management, as indicated by a gross profit margin of 26%. The EBITDA margin of 14.5% further highlights operational efficiency. Overall, Korn Ferry maintains solid profitability despite minor revenue contraction.
Balance Sheet
80
Positive
Korn Ferry maintains a strong balance sheet with a low debt-to-equity ratio of 0.30, indicating prudent leverage management. The equity ratio stands at 48.3%, reflecting a strong equity base relative to total assets. Return on equity is impressive at 13.2%, showcasing effective use of shareholder funds. The company's financial stability is further reinforced by substantial cash reserves, contributing to a favorable liquidity position.
Cash Flow
78
Positive
The company exhibits strong cash flow metrics, with a free cash flow growth rate of 31.9% year-over-year, indicating robust cash generation capabilities. The operating cash flow to net income ratio is 1.48, illustrating efficient cash conversion. Additionally, the free cash flow to net income ratio is 1.23, highlighting a healthy cash flow relative to earnings. Korn Ferry's cash flow performance supports its operational sustainability.
BreakdownJun 2025Jun 2024Jun 2023Jun 2022Jun 2021
Income Statement
Total Revenue2.76B2.80B2.86B2.64B1.82B
Gross Profit717.99M618.49M2.60B2.51B1.74B
EBITDA399.82M321.58M389.94M521.72M254.82M
Net Income246.06M169.15M209.53M326.36M114.45M
Balance Sheet
Total Assets3.86B3.68B3.57B3.46B3.06B
Cash, Cash Equivalents and Short-Term Investments1.04B983.75M888.86M1.04B914.45M
Total Debt568.07M580.27M561.24M595.30M598.78M
Total Liabilities1.99B1.94B1.92B1.91B1.69B
Stockholders Equity1.87B1.73B1.65B1.54B1.37B
Cash Flow
Free Cash Flow301.88M228.81M273.51M452.25M220.31M
Operating Cash Flow364.36M283.96M343.89M501.66M251.43M
Investing Cash Flow-125.50M-53.83M-323.48M-184.33M-61.38M
Financing Cash Flow-190.73M-116.33M-152.18M-137.44M-66.89M

Korn Ferry Technical Analysis

Technical Analysis Sentiment
Positive
Last Price73.54
Price Trends
50DMA
70.67
Positive
100DMA
67.39
Positive
200DMA
68.55
Positive
Market Momentum
MACD
0.93
Positive
RSI
54.60
Neutral
STOCH
49.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KFY, the sentiment is Positive. The current price of 73.54 is below the 20-day moving average (MA) of 73.63, above the 50-day MA of 70.67, and above the 200-day MA of 68.55, indicating a neutral trend. The MACD of 0.93 indicates Positive momentum. The RSI at 54.60 is Neutral, neither overbought nor oversold. The STOCH value of 49.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KFY.

Korn Ferry Risk Analysis

Korn Ferry disclosed 47 risk factors in its most recent earnings report. Korn Ferry 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

Korn Ferry Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$3.84B16.1013.49%2.80%-1.23%44.06%
70
Neutral
$966.50M137.371.71%1.28%6.17%-85.16%
67
Neutral
£2.85B10.424.69%215.06%2.73%-20.56%
66
Neutral
$3.19B19.69162.14%1.60%1.50%-44.95%
61
Neutral
$4.33B24.2212.75%5.62%-6.95%-41.84%
59
Neutral
$2.09B18.36-0.78%8.43%-3.79%-138.56%
57
Neutral
$2.25B36.1148.65%4.02%1.90%-60.33%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KFY
Korn Ferry
73.54
3.72
5.33%
HSII
Heidrick & Struggles
46.23
10.69
30.08%
NSP
Insperity
59.44
-39.39
-39.86%
MAN
ManpowerGroup
45.07
-26.70
-37.20%
RHI
Robert Half
39.84
-20.12
-33.56%
TNET
TriNet Group
65.72
-43.88
-40.04%

Korn Ferry Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Korn Ferry Enters New Credit Agreement with Wells Fargo
Neutral
Jul 2, 2025

On July 1, 2025, Korn Ferry entered into a new credit agreement with Wells Fargo Bank, National Association, and other lenders, with Wells Fargo serving as the administrative agent. This agreement marks the termination of a prior credit agreement, indicating a strategic financial restructuring for Korn Ferry.

The most recent analyst rating on (KFY) stock is a Buy with a $79.00 price target. To see the full list of analyst forecasts on Korn Ferry stock, see the KFY Stock Forecast page.

DividendsBusiness Operations and Strategy
Korn Ferry Declares Cash Dividend for Shareholders
Positive
Jun 17, 2025

On June 17, 2025, Korn Ferry‘s Board of Directors declared a cash dividend of $0.48 per share, payable on July 31, 2025, to shareholders of record as of July 3, 2025. This decision reflects the company’s confidence in its business strength and strategic execution, as part of its capital allocation strategy.

The most recent analyst rating on (KFY) stock is a Buy with a $79.00 price target. To see the full list of analyst forecasts on Korn Ferry stock, see the KFY Stock Forecast page.

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.Date of analysis: Jul 01, 2025