Is Now The Time To Look At Buying Korn Ferry (NYSE:KFY)?

While Korn Ferry (NYSE:KFY) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$66.64 and falling to the lows of US$46.95. 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$48.84 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.

View our latest analysis for Korn Ferry

Is Korn Ferry Still Cheap?

Good news, investors! Korn Ferry is still a bargain right now according to my price multiple model, which compares 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 8.1x is currently well-below the industry average of 17.1x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because Korn Ferry’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Korn Ferry?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -12% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Korn Ferry. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although KFY is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to KFY, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on KFY for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Korn Ferry as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for Korn Ferry and we think they deserve your attention.

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.

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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.