Blue-chip executive recruiting firm Korn Ferry trades for just 11x P/E and 7x F2021 EV/EBITDA despite a mix shift towards cyclically resistant database products and high-growth recruiting process outsourcing ("RPO").
A trio of Digital acquisitions closed in November add $35-40m of EBITDA and $0.40-0.45 to F2021 EPS, accelerating reported earnings growth in the fiscal year beginning April 2020.
Using public and private market comparable valuations, KFY’s Digital ($120m EBITDA) and RPO ($40m EBITDA) segments are worth KFY's entire market cap on their own.
With an additional $200m in core search and consulting EBITDA, KFY shares are worth $60-65, and up to $80 should industry growth return this year.
"I've heard a lot about Korn Ferry's ability to build a brand around digital transformation and attract the right leaders… and to make use of the data and insights to drive strategic sales growth… as