Korn/Ferry International, Inc. (KFY) recently rebounded from a key trend line that has been supporting prices for most of the last 10 months to move back within striking distance of the 52-week high at$18
Company Description
Korn/Ferry International operates as an executive recruitment and talent management agency worldwide. The company was founded in 1969 and has a market cap of $689 million.
Korn Ferry saw a nice spike in both sales in earnings in its November Q2 results as stability in the global economy boosted the company’s business. Korn Ferry saw big gains in its fee revenue, which was up 20% from just last quarter to $140 million, driving its big earnings surprise of 9 cents against the Zacks Consensus Estimate calling for a one penny loss.
The company also boosted its results with a continued emphasis on cutting costs, posting a 16% decline, or $5.1 million, in general and administrative expenses. The company also has $69 million in cash and equivalents to help insulate its balance sheet.
Estimates Rising
Analysts have clearly been optimistic on Korn Ferry as global job losses slow and companies look to start hiring again. The current-year estimate has added 27 cents in the last 3 months to 28 cents. The next-year estimate has added 26 cents in the same time to 77 cents, a 179% growth projection.
When factoring the gains of the last 10 months, shares of KFY are a bit pricey, trading with a forward P/E of 54X. But the valuation pictures does come into line when considering the big next-year estimate.
The Chart
Shares of KFY began the current up swing after bottoming out with the market in early March just below $8. More recently, KFY rebounded from a key trend line at $14.50 after hitting a new 52-week high late in 2009. Take a look at the chart below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
