Kevin Steinke, an analyst from Barrington, maintained the Buy rating on HireQuest (HQI – Research Report). The associated price target is $16.00.
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Kevin Steinke has given his Buy rating due to a combination of factors, despite the challenging market conditions reflected in HireQuest’s Q4/24 results. The company’s franchise royalty fees, which form a significant portion of its revenue, experienced a decline, but this was largely attributed to macroeconomic uncertainties and specific disruptions like severe winter weather and the timing of the holiday season.
Despite these challenges, HireQuest demonstrated resilience with a slight increase in adjusted EPS, which surpassed expectations due to lower-than-expected tax rates and interest expenses. Additionally, the company managed to reduce SG&A expenses significantly, primarily through a decrease in workers’ compensation costs. These factors, coupled with the company’s strategic positioning as a nationwide franchisor with a diverse portfolio of staffing solutions, underpin Steinke’s optimistic outlook and Buy rating for HireQuest’s stock.