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On Tuesday, UBS analyst Joshua Chan adjusted the price target for Korn Ferry (NYSE:KFY), a global organizational consulting firm, to $74.00 from the previous $75.00, while maintaining a Neutral stock rating. The revision comes as Korn Ferry, currently trading at 14.38x earnings with a 2.85% dividend yield and generating $2.71 billion in revenue, approaches its fourth fiscal quarter (FQ4) report, with indications of a potential moderation in organic growth during the period.
Chan noted that the North American Executive Search nowcast hints at a slight slowdown in growth for FQ4. In addition, other data points suggest a continued subdued confidence among large businesses. Conversations with a private competitor also revealed slower trends into May, aligning with the recent dip in overall US job listings. According to InvestingPro analysis, the company appears slightly undervalued, with additional insights available in the comprehensive Pro Research Report, one of 1,400+ detailed company analyses available to subscribers.
Despite the sluggish environment, Chan believes that the near-term consensus expectations for Korn Ferry are reasonably well-calibrated. UBS’s projections for FQ4 EBITDA and EPS are in line with consensus, and the expectations for the first fiscal quarter (FQ1) are deemed reasonable, though there is a possibility that management may opt for a more conservative guidance.
As Korn Ferry prepares to release its FQ4 results, the analyst anticipates a subdued tone during the reporting but considers the risk/reward balance to be neutral leading up to the announcement. This update comes as investors and analysts alike monitor the company’s performance indicators closely.
In other recent news, Korn Ferry reported its financial results for the third quarter of fiscal year 2025, exceeding analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $1.19, surpassing the forecasted $1.13, and revenue reached $676.5 million, beating the anticipated $650.45 million. Korn Ferry’s strategic initiatives, focusing on AI and digital solutions, contributed to this strong performance, with a 13% year-over-year increase in adjusted EBITDA. Looking ahead, the company projects fourth-quarter fee revenue between $680 million and $700 million, with an adjusted EBITDA margin of 16.8% to 17%. Truist Securities maintained a Buy rating on Korn Ferry shares, with a price target of $84, highlighting the company’s resilience amidst macroeconomic uncertainty. Analysts from Truist are optimistic about Korn Ferry’s valuation, noting it trades at an attractive 7.2 times enterprise value to estimated 2025 earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). Korn Ferry’s strategic focus on consolidating its intellectual property is expected to unlock new sales opportunities and facilitate margin expansion in the coming quarters.
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