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Korn Ferry (KFY) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Korn Ferry (KFY)

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Intrinsic Value (DCF)

Current$68.74
→
Intrinsic$171.45
+149%
$119.47$171.45$270.14
Market implies 1% growth for 5 years
DCF analysis suggests KFY could have 149% upside at 19% growth — verify assumptions match your view.
At $69, the market prices in only 1% growth — below historical 19%, suggesting low expectations.
Range: Bear $119 → Bull $270. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →15%17%19%21%
8%$207$223$241$260
10%$148$159$171$184
12%$115$124$133$143
14%$95$101$108$116

Bull Case

  • Bull case ($270) offers 293% upside at 23% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (19%)

Bear Case

  • Bear case ($119) with 15% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$360.27M
Year 2$429.97M
Year 3$513.14M
Year 4$612.40M
Year 5$730.86M
Terminal$10.75B

📐 Model Inputs

Growth Rate19.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$301.88MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is KFY stock undervalued or overvalued?
🟢 UNDERVALUED

KFY trades at $68.74 vs. our DCF-derived intrinsic value of $171.45, implying +157% upside. At a 10.0% WACC and 19.3% projected FCF growth, the market appears to be underpricing the present value of KFY's future cash flows. The bear case ($115.83) still suggests upside, providing margin of safety.

What is KFY's intrinsic value?

Using a 5-year DCF model: Base FCF of $302M, projected at 19.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-436M net debt and dividing by 0.05B shares: Bear $115.83 | Base $171.45 | Bull $252.98. Current price $68.74 implies +157% to base case.

How is KFY's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 19.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($8.62B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 28.5x.