Korn Ferry Just Beat EPS By 6.2%: Here's What Analysts Think Will Happen Next

Investors in Korn Ferry (NYSE:KFY) had a good week, as its shares rose 5.5% to close at US$66.73 following the release of its yearly results. Korn Ferry reported US$2.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.23 beat expectations, being 6.2% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Korn Ferry

Following last week's earnings report, Korn Ferry's five analysts are forecasting 2025 revenues to be US$2.75b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 47% to US$4.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.82b and earnings per share (EPS) of US$4.67 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been a 7.7% lift in the price target to US$77.00, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Korn Ferry, with the most bullish analyst valuing it at US$79.00 and the most bearish at US$72.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 0.6% annualised decline to the end of 2025. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.6% annually for the foreseeable future. It's pretty clear that Korn Ferry's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Korn Ferry's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Korn Ferry analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Korn Ferry that we have uncovered.

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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.

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