NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, revenue growth, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- Despite the fact that KFY's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.15 is high and demonstrates strong liquidity.
- KFY's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 8.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Professional Services industry and the overall market on the basis of return on equity, KORN/FERRY INTERNATIONAL has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has increased to $47.76 million or 42.81% when compared to the same quarter last year. Despite an increase in cash flow, KORN/FERRY INTERNATIONAL's cash flow growth rate is still lower than the industry average growth rate of 92.68%.
Korn/Ferry International, together with its subsidiaries, provides executive recruitment, outsourced recruiting and leadership, and talent consulting and talent acquisition solutions. The company has a P/E ratio of 11.1, below the average diversified services industry P/E ratio of 11.2 and below the S&P 500 P/E ratio of 17.7. Korn Ferry International has a market cap of $736.5 million and is part of the
industry. Shares are down 32.4% year to date as of the close of trading on Tuesday.
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