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Bear of the Day

Korn Ferry (KFY - Free Report) posted back to back beats of the Zacks Consensus Estimate. That doesn't make a stock the Bear of the Day, so let's figure out why the stock is now a Zacks Rank #5 (Strong Sell) and the Bear of the Day.

The Numbers

KFY beat the Zacks Consensus Estimate of $0.54 by $0.04 for a 7.4% positive earnings surprise in the most recent quarter.

This wasn't the reason the stock fell some 21% the session following the release, so read on for why it did fall. Description

Korn/Ferry offers leadership and talent consulting services. It operates in around 37 countries and is based in Los Angeles.

Earnings History

Usually when a stock is the Bear of the Day, the earnings history is filled with misses. This is not the case for KFY, as there is one miss over the last five quarters that have been reported.

Estimates

Here is the real reason the stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day. The Zacks Consensus Estimate has fallen over the last month. The FY16 estimate stood at $2.56 in May but fell to $2.42 in June.

Next year has also saw a big move lower in estimates with the 2017 Zacks Consensus Estimate moving from $2.92 in May to $2.75 in June.

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #5 (Strong Sell) we see that estimates are moving higher.

KORN/FERRY INTL Price, Consensus and EPS Surprise

KORN/FERRY INTL Price, Consensus and EPS Surprise | KORN/FERRY INTL Quote

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Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Stocks Under $10, an investor service , where he recommends the stocks in the portfolio.

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