It's been a good week for Korn Ferry (NYSE:KFY) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.4% to US$65.60. Revenues were US$669m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.13 were also better than expected, beating analyst predictions by 18%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, Korn Ferry's five analysts are forecasting 2025 revenues to be US$2.83b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 67% to US$4.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.83b and earnings per share (EPS) of US$4.32 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 12% to US$71.50, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Korn Ferry, with the most bullish analyst valuing it at US$74.00 and the most bearish at US$66.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Korn Ferry's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Korn Ferry's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Korn Ferry is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Korn Ferry following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Korn Ferry's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Korn Ferry analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Korn Ferry , and understanding these should be part of your investment process.
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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.