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On Thursday, Truist Securities maintained its Buy rating on Korn/Ferry shares (NYSE:KFY) with a consistent price target of $84.00. The firm’s analysts highlighted Korn/Ferry’s resilience amidst macroeconomic uncertainty and potential for sales and margin growth. According to InvestingPro data, the company appears undervalued, currently trading at a P/E ratio of 14.4x with a PEG ratio of just 0.24, suggesting attractive growth potential relative to its valuation. Korn/Ferry, recognized for providing diverse solutions to its clients, has not seen a decline in new business despite the uncertain macroeconomic climate.
Truist Securities analysts underscored the company’s strategic moves, including the consolidation of its intellectual property onto a single system in the fourth quarter of the calendar year, which they believe could lead to increased sales and margin expansion opportunities. The analysts are optimistic about the stock’s valuation, noting that it is trading at an attractive 7.2 times enterprise value to estimated 2025 earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). InvestingPro analysis reveals the company maintains strong financial health with a ’GOOD’ overall rating, supported by robust cash flows and a solid balance sheet that holds more cash than debt.
The valuation represents a 29% discount compared to the average of Truist Securities’ human capital management (HCM) coverage universe. This is particularly noteworthy given that Korn/Ferry’s adjusted EBITDA margins are more than double the group average. Adding to its appeal for value investors, InvestingPro data shows the company has maintained dividend payments for 11 consecutive years, with a current yield of 2.83% and impressive dividend growth of 45.45% over the last twelve months. The Truist Securities team recommends Korn/Ferry shares to value investors following their non-deal roadshow (NDR) with CFO Bob Rozek and VP of Investor Relations Tiffany Louder.Discover 10+ additional exclusive InvestingPro Tips and comprehensive financial analysis in our detailed Pro Research Report, available along with extensive metrics for 1,400+ top US stocks.
Korn/Ferry’s focus on selling multiple solutions to its customers has been a key factor in its dynamic business approach. The company’s efforts to unify its intellectual property could potentially unlock new sales opportunities and facilitate margin expansion in the coming quarters.
The analysts’ reiteration of the Buy rating and $84.00 price target reflects confidence in Korn/Ferry’s future financial performance and its positioning within the market. The stock’s current valuation, as observed by Truist Securities, suggests that Korn/Ferry shares may present a compelling opportunity for investors looking for value in the human capital management sector.
In other recent news, Korn Ferry announced its financial results for the third quarter of fiscal year 2025, surpassing analysts’ expectations. The company reported an adjusted earnings per share (EPS) of $1.19, which exceeded the forecasted $1.13. Revenue reached $676.5 million, surpassing the anticipated $650.45 million, marking a 2% year-over-year increase at constant currency. Korn Ferry’s adjusted EBITDA also grew by 13% year-over-year, reflecting robust operational efficiency and cost management. These results align with Korn Ferry’s strategic focus on high-impact engagements and enhanced digital solutions. Looking forward, the company anticipates fourth-quarter fee revenue between $680 million and $700 million, with an adjusted EBITDA margin of 16.8% to 17%. Analyst firms such as William Blair and Goldman Sachs were part of the discussions, highlighting Korn Ferry’s strong consulting backlog and strategic transformation initiatives. The company remains committed to investing in talent and technology to sustain long-term growth, with a projected adjusted diluted EPS range of $1.22 to $1.30 for the next quarter.
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