Barrington analyst Kevin Steinke reiterated a Buy rating on Kelly Services today and set a price target of $25.00.
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Kevin Steinke has given his Buy rating due to a combination of factors that highlight Kelly Services’ strategic transformation and growth potential. Over the past several years, the company has shifted its focus from being a global staffing generalist to a leader in higher-margin specialty staffing and workforce solutions, primarily in North America. This transformation, led by former CEO Peter Quigley, involved exiting certain international markets and acquiring specialty workforce solutions businesses, particularly in the IT sector. These strategic moves have positioned Kelly Services to capitalize on faster-growing segments and enhance its profitability.
Additionally, Kelly Services has successfully increased revenue from outcome-based solutions, which are more profitable than traditional temporary staffing services. These solutions now account for a significant portion of the company’s revenue, contributing to improved margins. The company’s efforts to streamline operations and reduce costs have also led to a notable increase in its adjusted EBITDA margin. With the recent CEO transition to Christopher Layden, who brings extensive experience in workforce solutions, Kelly Services is expected to continue its strategic transformation and pursue further growth opportunities. These factors collectively suggest that the stock is undervalued and poised for long-term growth, justifying the Buy rating.
Based on the recent corporate insider activity of 54 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KELYA in relation to earlier this year.