Does the Recent 7% Drop in Korn Ferry Signal a Missed Opportunity for Investors in 2025?

• Wondering if Korn Ferry is a hidden value play or just riding industry trends? You are not alone, and we are about to dig in.
• The stock has seen some ups and downs recently, falling 7.1% in the past week and 6.1% over the past month. Long-term investors have enjoyed gains with a 29.4% three-year and 87.5% five-year return.
• Market sentiment has shifted as broader volatility and sector rotations have made investors more selective. Korn Ferry has attracted attention after new management initiatives and strategic partnerships came into the spotlight. These developments have helped shape perceptions around both the company’s future opportunities and its risks.
• Korn Ferry’s current valuation score stands at 6 out of 6, reflecting that it is undervalued in every check we run. Before we reveal exactly how this score is calculated and compare it to other approaches, we will also explore an additional way to assess value, so keep reading.

Korn Ferry delivered -9.3% returns over the last year. See how this stacks up to the rest of the Professional Services industry.

Approach 1: Korn Ferry Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used valuation approach that estimates a company’s intrinsic value by projecting its future free cash flows and discounting them back to today’s value. This helps investors understand what a business may truly be worth based on its ability to generate cash over time.

For Korn Ferry, the latest reported Free Cash Flow (FCF) is $289.9 million. Projections foresee this figure growing over the next decade. By 2035, the company’s FCF is expected to reach approximately $431.2 million, as estimated by analysts and extrapolated by Simply Wall St where direct analyst projections are not available. These estimates assume a steady but moderate rate of annual FCF growth, primarily derived from underlying business performance in the Professional Services sector.

After discounting these future cash flows back to the present, the DCF model calculates an intrinsic value of $148.81 per share. Compared to the current share price, this represents a 56.1% discount, indicating that Korn Ferry’s stock is significantly undervalued on this basis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Korn Ferry is undervalued by 56.1%. Track this in your watchlist or portfolio, or discover 840 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Korn Ferry.

Approach 2: Korn Ferry Price vs Earnings

The Price-to-Earnings (PE) ratio is often the preferred metric for valuing profitable firms like Korn Ferry, as it reflects how much investors are willing to pay for each dollar of current earnings. Because Korn Ferry consistently generates positive earnings, the PE ratio offers a clear snapshot of how the market prices its profitability relative to other opportunities.

Growth expectations, risk, and industry dynamics all shape what might be considered a “fair” PE ratio for any given company. Fast-growing firms with stable outlooks tend to command higher PE multiples, while companies facing greater uncertainty or slower growth often trade at lower multiples.

Korn Ferry currently trades at a PE ratio of 13.9x. For context, the average PE across the Professional Services industry stands at 25.0x, while similar peers are trading at an average of 32.2x. At a glance, this suggests Korn Ferry looks cheaply valued compared to its broader competitive set.

However, looking only at peer or industry averages misses important nuances. Simply Wall St’s Fair Ratio, currently calculated at 22.9x for Korn Ferry, blends factors such as its earnings growth outlook, profit margins, market cap, industry profile, and risk factors. This tailored benchmark offers a more accurate yardstick, since it reflects what a reasonable multiple should be for a company with Korn Ferry’s specific characteristics.

Comparing the Fair Ratio to the company’s actual PE, Korn Ferry appears significantly undervalued. Its 13.9x multiple is well below the 22.9x Fair Ratio, which strengthens the view that the company may have meaningful upside potential based on earnings.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1410 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Korn Ferry Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply your own story about a company. It is where you combine your perspective and insights with your fair value estimate, plus your expectations for future revenue, earnings, and margins. Narratives provide a bridge between the company’s fundamentals and what its numbers really mean by linking your view of its story to a full financial forecast and a logical fair value.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy, accessible framework to make smarter buy or sell decisions. When you create or explore a Narrative, you can see at a glance whether your Fair Value for Korn Ferry is above or below the current market price, giving you actionable insight into timing your investments. What makes Narratives especially powerful is that they are automatically updated in real time as new information, like earnings reports or industry news, becomes available, so your analysis always stays current.

For example, while some investors anticipate strong growth in AI-driven productivity and set a Fair Value for Korn Ferry as high as $95, others take a more cautious view on economic risks and estimate its Fair Value closer to $72.

Do you think there's more to the story for Korn Ferry? Head over to our Community to see what others are saying!

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.

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