Franklin Covey Company (FC) AI Stock Analysis

• Market Cap: $259.23M
• Dividend Yield: N/A
• Average Volume (3M): 197.99K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.95
• Revenue Growth: 2.53%
• EPS Growth: 5.95%
• Country: US
• Employees: 1,084
• Sector: Industrials
• Sector Strength: 65
• Industry: Consulting Services
• EPS (TTM): 1.33
• Shares Outstanding: 12,987,725
• 10 Day Avg. Volume: 190,047
• 30 Day Avg. Volume: 197,987
• PEG Ratio: 2.53
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.31
• Price to Cash Flow (P/CF): 6.60
• P/FCF Ratio: 6.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $45.00
• Price Target Upside: 126.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Franklin Covey's overall stock score of 60 reflects its strong financial foundation and efficient management, which are tempered by recent revenue fluctuations and free cash flow volatility. The technical analysis indicates bearish momentum, and the recent earnings call highlights challenges in government and international revenues. While the valuation is reasonable, these factors collectively suggest a cautious outlook, with potential for long-term stability but short-term uncertainties.

Positive Factors

Analyst Rating

Analyst's recommendation for Franklin Covey remains OUTPERFORM with a $45 price target, indicating a 27% upside from current levels.

Investment Opportunity

Franklin Covey's shares are trading at a discount to its Ed Tech peer group, making it an attractive investment opportunity.

Strategic Investments

The strategic growth investments are viewed as an appropriate trade-off for accelerated growth and profitability.

Negative Factors

Earnings Guidance

Initial FY/25 earnings guidance below expectations due to planned investments in strategic growth initiatives.

Earnings Performance

Revenue in the second quarter decreased 2.8% to $59.6 million, below estimates and consensus.

Financial Guidance

Third quarter and full-year guidance was reduced to reflect government contract terminations and uncertain business conditions.

Franklin Covey Company Business Overview & Revenue Model

Company Description

Franklin Covey Co. provides training and consulting services in the areas of execution, sales performance, productivity, customer loyalty, and educational improvement for organizations and individuals worldwide. The company operates through three segments: Direct Offices, International Licensees, and Education Practice. It also provides a suite of individual-effectiveness and leadership-development training and products. The company was incorporated in 1983 and is headquartered in Salt Lake City, Utah.

How the Company Makes Money

Franklin Covey Company generates revenue through its comprehensive suite of training and consulting services. The company offers workshops, seminars, and online courses that address key areas such as leadership development, productivity enhancement, and organizational effectiveness. Revenue is primarily derived from subscriptions to its services, licensing of its content, and fees for its training programs. Additionally, Franklin Covey forms strategic partnerships with educational institutions and corporate clients to expand its reach and impact, further contributing to its earnings. The company's business model relies on a mix of direct sales, online platforms, and partnerships to distribute its products and services, enabling it to address the needs of a diverse client base worldwide.

Franklin Covey Company Financial Statement Overview

Summary

Franklin Covey Company presents a solid financial position with stable revenue growth, strong profitability margins, and a healthy balance sheet characterized by low leverage. The company efficiently manages its resources, maintaining positive cash flows. Potential risks include recent fluctuations in revenue and free cash flow, which necessitate careful monitoring.

Income Statement

Franklin Covey Company demonstrates a stable financial performance with consistent revenue growth from 2021 to 2025. The Gross Profit Margin remains strong, averaging around 75%, while the Net Profit Margin shows improvement, reaching 6.2% in TTM. However, there is a slight decline in total revenue in the latest TTM period, indicating a potential risk if this trend continues.

Balance Sheet

The company's balance sheet is robust with a low Debt-to-Equity Ratio of 0.02 in TTM, indicating low leverage. The Equity Ratio is healthy at 32.8%, showcasing a stable financial structure. Return on Equity has improved, reflecting efficient management of shareholder funds despite a decrease in stockholders' equity.

Cash Flow

The cash flow statement reveals strong operational cash generation with a healthy Operating Cash Flow to Net Income Ratio. Free Cash Flow has shown volatility, decreasing in the most recent TTM period, which may impact financial flexibility. The consistent operating cash flow is a positive indicator of the company's ability to sustain operations.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
286.19M	287.23M	280.52M	262.84M	224.17M	198.46M
	Gross Profit
218.35M	221.07M	213.49M	201.91M	172.90M	145.37M
	EBIT
26.99M	33.04M	26.36M	23.67M	8.10M	4.69M
	EBITDA
34.53M	43.08M	39.98M	38.17M	23.82M	18.66M
	Net Income Common Stockholders
17.78M	23.40M	17.78M	18.43M	13.62M	-9.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
40.39M	48.66M	38.23M	60.52M	47.42M	27.14M
	Total Assets
221.34M	261.54M	245.92M	259.15M	249.65M	205.44M
	Total Debt
4.15M	6.03M	15.33M	24.26M	32.86M	36.65M
	Net Debt
-36.24M	-42.63M	-22.90M	-36.25M	-14.56M	9.51M
	Total Liabilities
148.81M	178.40M	167.26M	176.34M	169.79M	145.98M
	Stockholders Equity
72.53M	83.14M	78.65M	82.81M	79.86M	59.45M
Cash Flow		Free Cash Flow
33.78M	56.56M	22.19M	46.92M	42.07M	18.30M
	Operating Cash Flow
42.82M	60.26M	35.74M	52.25M	46.18M	27.56M
	Investing Cash Flow
-10.80M	-11.31M	-13.55M	-5.33M	-14.31M	-11.87M
	Financing Cash Flow
-32.59M	-38.66M	-44.18M	-32.67M	-11.48M	-16.56M

Franklin Covey Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.84
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FC, the sentiment is Negative. The current price of 19.84 is below the 20-day moving average (MA) of 23.03, below the 50-day MA of 28.49, and below the 200-day MA of 36.07, indicating a bearish trend. The MACD of -2.64 indicates Negative momentum. The RSI at 26.78 is Positive, neither overbought nor oversold. The STOCH value of 40.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FC.

Franklin Covey Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ICFI	70 Outperform	$1.54B	14.32	11.60%	0.67%	2.88%	33.76%
CRAI	70 Neutral	$1.09B	23.91	21.96%	1.12%	10.17%	24.74%
Sector *	62 Neutral	$4.16B	11.31	5.46%	215.65%	4.12%	-8.47%
FC	60 Neutral	$259.23M	15.03	24.81%	―	2.53%	5.95%
AERT	60 Neutral	$32.08M	0.45	112.00%	―	34.17%	―
FORR	51 Neutral	$187.91M	―	-2.45%	―	-10.05%	-288.36%
RGP	49 Neutral	$180.56M	―	-31.18%	10.45%	-16.27%	-589.83%

Franklin Covey Company Corporate Events

Franklin Covey Announces New CFO and Leadership Changes

On April 16, 2025, Franklin Covey Company announced changes in its executive financial leadership. Stephen D. Young will retire as Chief Financial Officer effective May 1, 2025, after 24 years of service, transitioning to a senior advisor role until August 31, 2025. Jessica Betjemann will succeed him as CFO, bringing over 30 years of financial experience, including her recent role as CFO of Gogo, Inc. Additionally, A. Derek Hatch will be appointed as Chief Accounting Officer, Controller, and Treasurer, effective the same date, continuing his long tenure with the company.

Spark’s Take on FC Stock

According to Spark, TipRanks’ AI Analyst, FC is a Neutral.

Franklin Covey’s stock score of 59 reflects a blend of strengths and challenges. The company’s robust financial performance, characterized by stable revenue growth and a healthy balance sheet, is a key positive factor. However, bearish technical indicators and a downward revision in guidance from the latest earnings call pose significant concerns. The moderate valuation provides a neutral impact, with no dividend to enhance appeal. Overall, while the company demonstrates solid fundamentals, current market and operational challenges suggest a cautious outlook.

To see Spark’s full report on FC stock, click here.

Franklin Covey Reports Q2 Fiscal 2025 Financial Results

Franklin Covey Co. reported its financial results for the second quarter of fiscal 2025, which ended on February 28, 2025. The company experienced a decrease in consolidated revenue to $59.6 million from $61.3 million in the previous year, with the Enterprise Division facing challenges due to canceled government contracts and economic uncertainties. However, the Education Division saw a 3% increase in revenue. Despite a net loss of $1.1 million, Franklin Covey is optimistic about its new go-to-market and sales force strategy in North America, which has already shown positive results in client expansion and new logo acquisition.

Franklin Covey Approves Key Resolutions at Annual Meeting

Franklin Covey Company held its Annual Meeting of Shareholders on January 24, 2025, where several key resolutions were passed. Notably, all director nominees were elected, executive compensation was approved, Deloitte & Touche was ratified as the independent accounting firm, and an amendment to the company’s Omnibus Incentive Plan was approved.