When Should You Buy Korn Ferry (NYSE:KFY)?

While Korn Ferry (NYSE:KFY) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$52.90 at one point, and dropping to the lows of US$44.81. 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$47.82 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

What's The Opportunity In Korn Ferry?

According to my valuation model, the stock is currently overvalued by about 21%, trading at US$47.82 compared to my intrinsic value of $39.41. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Korn Ferry’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Korn Ferry generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Korn Ferry, it is expected to deliver a relatively unexciting earnings growth of 8.1%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Korn Ferry, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in KFY’s future outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe KFY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on KFY for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Korn Ferry has 1 warning sign and it would be unwise to ignore it.

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.