NEW YORK (TheStreet) -- Korn/Ferry International (KFY) was rising 9.74% to $28.34 at 10:57 a.m. on Friday after the world's largest executive search firm announced third-quarter results that surpassed analysts' expectations.
The company reported earnings per share of 43 cents, which surpassed the consensus estimate of 34 cents and marked a year-over-year increase from 31 cents. Korn/Ferry reported revenue of $250.9 million, which beat the consensus estimate of $229.23 million and represented a 19.3% year-over-year increase.
The company also issued guidance of 35 cents to 41 cents a share for the fourth quarter, which was in line with the Capital IQ consensus estimate.
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TheStreet Ratings team rates KORN/FERRY INTERNATIONAL as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KORN/FERRY INTERNATIONAL (KFY) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, reasonable valuation levels and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KFY's revenue growth has slightly outpaced the industry average of 18.0%. Since the same quarter one year prior, revenues rose by 20.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KFY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, KFY has a quick ratio of 1.90, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 1166.66% and other important driving factors, this stock has surged by 31.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KFY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 1468.5% when compared to the same quarter one year prior, rising from $1.20 million to $18.76 million.
- You can view the full analysis from the report here: KFY Ratings Report