U.S. Markets open in 4 hrs 39 mins
  • S&P Futures

    4,297.75
    -10.00 (-0.23%)
     
  • Dow Futures

    34,065.00
    -53.00 (-0.16%)
     
  • Nasdaq Futures

    13,603.50
    -54.75 (-0.40%)
     
  • Russell 2000 Futures

    2,019.50
    -3.80 (-0.19%)
     
  • Crude Oil

    86.64
    +0.11 (+0.13%)
     
  • Gold

    1,788.70
    -1.00 (-0.06%)
     
  • Silver

    20.00
    -0.09 (-0.45%)
     
  • EUR/USD

    1.0168
    -0.0003 (-0.0305%)
     
  • 10-Yr Bond

    2.8240
    0.0000 (0.00%)
     
  • Vix

    19.82
    -0.13 (-0.65%)
     
  • GBP/USD

    1.2096
    +0.0001 (+0.0109%)
     
  • USD/JPY

    134.8020
    +0.5870 (+0.4374%)
     
  • BTC-USD

    23,826.45
    -181.10 (-0.75%)
     
  • CMC Crypto 200

    568.67
    -3.24 (-0.57%)
     
  • FTSE 100

    7,540.93
    +4.87 (+0.06%)
     
  • Nikkei 225

    29,222.77
    +353.86 (+1.23%)
     

Is Korn Ferry (NYSE:KFY) Potentially Undervalued?

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

While Korn Ferry (NYSE:KFY) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$68.99 at one point, and dropping to the lows of US$57.52. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Korn Ferry's current trading price of US$58.50 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Korn Ferry’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Korn Ferry

What's the opportunity in Korn Ferry?

Great news for investors – Korn Ferry is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 10.73x is currently well-below the industry average of 16.83x, meaning that it is trading at a cheaper price relative to its peers. However, given that Korn Ferry’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Korn Ferry look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 6.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Korn Ferry, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since KFY is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on KFY for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy KFY. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Diving deeper into the forecasts for Korn Ferry mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Korn Ferry, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.