March 29, 2017

Valens Equities Weekly Equity Idea Highlight for March 29, 2017 – Korn/Ferry International

This week the Valens Securities team highlights our most interesting equity insight from across our tools and our analysis.

Markets expect an ROA’ decline post-Hay acquisition, but macro tailwinds and management alignment point to continued strong execution despite of some potential near-term operational headwinds

veih 2017 03 29

KFY is trading at a 14.6x UAFRS-based P/E (Fwd V/E’), in the middle of historical valuations. At current valuations, market expectations are still relatively muted. Markets are expecting modest 7% UAFRS adjusted Asset growth, with UAFRS adjusted ROA remaining level around 2016 recent lows of 19%. On the other hand, analysts are actually projecting adjusted ROA to ramp going forward, with adjusted ROA reaching 26%, levels not seen since 2007-2008, as the firm benefits from an improving economic environment.

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