Korn Ferry (NYSE: KFY)

Sector: Industrials Industry: Staffing & Employment Services CIK: 0000056679
Market Cap 2.76 Bn
P/B 5.31
P/E 66.66
P/S 3.91
ROIC (Qtr) 10.79
Div Yield % 0.78
Rev 1y % (Qtr) 7.02
Total Debt (Qtr) 549.70 Mn
Debt/Equity (Qtr) 0.28
Add ratio to table...

About

Korn Ferry, a leading global organizational consulting firm (NYSE: KFY), operates in the human capital consulting industry. The company provides a range of services and products designed to help organizations navigate the complexities of the modern workplace. Korn Ferry is renowned for its strong brand and high-quality solutions, positioning it well for future growth and expansion. In the human capital consulting industry, Korn Ferry offers a comprehensive suite of services and products, focusing on organizational strategy, assessment and succession,...

Read more

Investment thesis

Bull case

  • Strong operating cash flow of 353.60M provides robust 0.64x coverage of total debt 549.70M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 761.58M provide 23.08x coverage of short-term debt 33M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 353.60M provides exceptional 17.62x coverage of interest expenses 20.07M, showing strong debt service capability.
  • Operating cash flow of 353.60M provides exceptional 97.14x coverage of minority interest expenses 3.64M, showing strong core operations.
  • Strong tangible asset base of 2.72B provides 4.94x coverage of total debt 549.70M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 353.60M barely covers its investment activities of (131.17M), with a coverage ratio of -2.70, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 353.60M provides thin coverage of dividend payments of (95.72M) with a -3.69 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 761.58M provide limited coverage of acquisition spending of (44.44M), which is -17.14x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Long-term investments of 266.55M represent a high 0.86x of fixed assets 308.37M, indicating potential overexposure to financial assets versus operational capabilities.
  • Free cash flow of 272.57M represents just -50.35x of debt issuance (5.41M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Staffing & Employment Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TNET Trinet Group, Inc. 2.92 Bn 13.22 0.86 0.94 Bn
2 KFY Korn Ferry 2.76 Bn 66.66 3.91 0.55 Bn
3 RHI Robert Half Inc. 2.48 Bn 18.65 0.46 0.25 Bn
4 MAN ManpowerGroup Inc. 1.76 Bn 3.55 0.08 1.64 Bn
5 KFRC Kforce Inc 1.11 Bn -12.63 1.14 0.07 Bn
6 BBSI Barrett Business Services Inc 0.94 Bn 17.65 1.01 0.03 Bn
7 NSP Insperity, Inc. 0.92 Bn -131.16 0.13 0.44 Bn
8 KELYA Kelly Services Inc 0.33 Bn -1.29 0.08 0.16 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.70 0.72
EV to Cash from Ops. EV/CFO 86.37 13.34
EV to Debt EV to Debt 4.75 16.96
EV to EBIT EV/EBIT 39.83 6.77
EV to EBITDA EV/EBITDA 36.81 5.70
EV to Free Cash Flow [EV/FCF] EV/FCF 309.92 27.09
EV to Market Cap EV to Market Cap 0.95 0.88
EV to Revenue EV/Rev 3.70 0.75
Price to Book Value [P/B] P/B 5.31 2.96
Price to Earnings [P/E] P/E 66.66 -37.77
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.73 -0.44
Dividend Payout Ratio % Div Payout % (Qtr) 36.10 -81.87
Dividend per Basic Share Div per Share (Qtr) 1.81 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 34.36 115.87
Interest Coverage Int. cover (Qtr) 18.94 -11.60
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -67.36 24.71
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 9.60 155.53
Dividend Growth (1y) % Div 1y % (Qtr) 29.29 35.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 5.32 -2,529.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 22.57 -29.98
EBIT Growth (1y) % EBIT 1y % (Qtr) 10.72 -51.52
EBT Growth (1y) % EBT 1y % (Qtr) 11.08 -79.33
EPS Growth (1y) % EPS 1y % (Qtr) 5.70 -2,182.39
FCF Growth (1y) % FCF 1y % (Qtr) 0.12 229.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.86 12.54
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.76 1.87
Cash Payout Ratio Cash Payout (Qtr) 0.22 0.36
Cash Ratio Cash Ratio (Qtr) 1.02 0.80
Current Ratio Curr Ratio (Qtr) 2.14 1.85
Debt to Equity Ratio Debt/Equity (Qtr) 0.28 1.53
Interest Cover Ratio Int Coverage (Qtr) 18.94 -11.60
Times Interest Earned Times Interest Earned (Qtr) 18.94 -11.60
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.70 -8.99
EBIT Margin % EBIT Margin % (Qtr) 13.38 -51.06
EBT Margin % EBT Margin % (Qtr) 12.67 -11.99
Gross Margin % Gross Margin % (Qtr) 88.00 33.35
Net Profit Margin % Net Margin % (Qtr) 9.20 -13.87