KFRC
Kforce Inc.
$55.12
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 6.5% above fair value
You pay
$55.12
Bear
$41.41
Fair
$51.76
Bull
$62.11
Bear
$41.41
-24.9%
$3.13 × 12x P/E
Fair
$51.76
-6.1%
$3.13 × 15x P/E
Bull
$62.11
+12.7%
$3.13 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
17.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $71.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $51.76 per share.
Warnings
The company's reported profits differ from official accounting profits by 60%. Check what costs are being left out of the adjusted number.
The company pays out 81% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $193.27 (above our primary estimate by 312%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $71.00 (from 10 analysts). Our estimate is 34% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples