Korn/Ferry Int. (KFY) Stock Forecast & Price Target

Korn Ferry's positive outlook is bolstered by an increase in CEO confidence, as indicated by a rise from 46 in 4Q23 to 53 in 1Q24, suggesting a favorable environment for executive recruitment and organizational consulting. The company's projected fee revenue for F26 is estimated to be $3.067 billion, reflecting a 6% growth, with the Consulting segment experiencing a 7% year-over-year increase in new business driven by international projects. Additionally, private executive search firms have reported an uptick in search revenue growth expectations, rising to 6.0% in 4Q, significantly higher than the previous quarter and the trailing twelve-month average, indicating strong demand for Korn Ferry's services.

Korn Ferry has experienced a year-over-year decline in its Executive Search segment of 20%, along with a 6.5% decline in Interim recruiting amidst decreasing executive turnover and potential reluctance of executives to engage search services, which poses significant risks to revenue generation. The company has also indicated a trend of slowing Subscription & Licensing revenue growth in its Digital segment over the past 12 to 18 months, alongside expectations of declining EBITDA margins in the near term. Additional challenges include potential pricing pressure from competing boutiques and the impact of currency fluctuations, both of which could further constrain Korn Ferry's financial performance amidst an uncertain economic environment.