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Adecco Group AG (AHEXY)
OTHER OTC:AHEXY
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Adecco Group AG
(OTC:AHEXY)
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Rating:71Outperform
Price Target:
$15.50
â–²(5.66% Upside)
Adecco Group AG's overall stock score of 71 reflects strong financial performance driven by revenue growth and robust cash flow, supported by a reasonable valuation and positive earnings call insights. However, technical analysis indicates potential bearish momentum, and profitability challenges remain a concern. The attractive dividend yield adds to the stock's appeal.
Positive Factors
Market Share Gains
Significant market share gains indicate strong competitive positioning, enhancing long-term growth prospects and reinforcing Adecco's leadership in the staffing industry.
Strong Cash Flow
Robust cash flow and high cash conversion ratio support liquidity and operational needs, enabling strategic investments and debt management, crucial for sustainable growth.
Revenue Growth in Training
Strong growth in training and upskilling segments reflects high demand, positioning Adecco to capitalize on structural trends in workforce development.
Negative Factors
Gross Margin Decline
Declining gross margins indicate pressure on pricing and cost management, potentially impacting profitability if not addressed through operational efficiencies.
Challenges in Perm Placement
Decreased permanent placement revenues suggest difficulties in client recruitment confidence, which could hinder revenue growth in this segment.
Logistics Sector Challenges
Challenges in the logistics sector may limit revenue growth and require strategic adjustments to mitigate impacts on overall performance.
Adecco Group AG (AHEXY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.88B
Dividend Yield4.22%
Average Volume (3M)413.00
Price to Earnings (P/E)15.8
Beta (1Y)0.21
Revenue Growth-2.35%
EPS Growth-3.74%
CountryUS
Employees33,597
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.39
Shares Outstanding336,853,120
10 Day Avg. Volume290
30 Day Avg. Volume413
Financial Highlights & Ratios
PEG Ratio-1.61
Price to Book (P/B)1.13
Price to Sales (P/S)0.17
P/FCF Ratio7.15
Enterprise Value/Market Cap2.30
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit2.54
Enterprise Value/Ebitda15.85
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Adecco Group AG Business Overview & Revenue Model
Company DescriptionAdecco Group AG, together with its subsidiaries, provides human resource services to businesses and organizations in Europe, North America, Asia Pacific, South America, and North Africa. It offers flexible placement, permanent placement, outsourcing, training, upskilling and reskilling, career transition and workforce transformation, technology consulting and talent, tech academy, digital staffing services, and talent advisory and solutions under the Adecco, Adia, General Assembly, Badenoch + Clark, LHH, pontoon, Spring, and Modis. The company also operates Hired, a talent recruitment platform. As of December 31, 2021, it operated approximately 4,300 branches in 59 countries and territories. The company was formerly known as Adecco S.A. Adecco Group AG was founded in 1957 and is based in Zurich, Switzerland.
How the Company Makes MoneyAdecco Group AG generates revenue primarily through fees charged for its staffing services. The company earns money by placing temporary and permanent personnel in client organizations, receiving a fee that typically comprises a markup on the wages of the workers supplied. Key revenue streams include temporary staffing, where clients pay for labor on an hourly basis, and permanent placement services, which involve a one-time fee for successfully placing candidates. Additionally, Adecco offers recruitment process outsourcing (RPO) and managed services provider (MSP) solutions, which are also significant contributors to its earnings. The company has established partnerships with various corporations and public sector organizations, enhancing its ability to provide tailored workforce solutions. Factors such as labor market conditions, demand for skilled labor, and economic trends play crucial roles in influencing Adecco's financial performance.
Adecco Group AG Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Positive
The call highlighted positive revenue trends and market share gains, particularly in the U.S. and training segments, alongside strong cash flow management. However, there were notable challenges in gross margin declines and specific sectors like logistics and permanent placements. Overall, the positive aspects, including strategic progress in key markets, outweigh the challenges.Q3-2025 Updates
Positive Updates
Significant Market Share Gains
The group and Adecco gained market share by 375 and 300 basis points, respectively, indicating strong competitive positioning.
Revenue Growth Across Key Regions
Group revenues reached EUR 5.8 billion, a 3.4% increase year-on-year on an organic trading days adjusted basis, with Adecco U.S. revenues increasing by 20% year-on-year.
Strong Cash Flow and Cash Conversion
Operating cash flow was EUR 200 million, up EUR 79 million from the prior year, with a strong cash conversion ratio of 110%.
Akkodis Germany Turnaround Progress
Turnaround plan in Akkodis Germany is progressing well with targeted savings now at EUR 50 million, contributing to an expected return to healthy profitability by year-end.
Positive Outlook in Training and Upskilling
EZRA and General Assembly showed strong growth with revenues up 59% and 48%, respectively, indicating high demand in the training and upskilling market.
Negative Updates
Gross Margin Decline
Gross margin reached 19.2%, which represents a modest year-on-year decrease of 10 basis points on an organic basis.
Challenges in Perm Placement
Permanent placement revenues were 7% lower, reflecting challenges in achieving higher client recruitment confidence.
Logistics Sector Challenges
Logistics presented some challenges in key markets, negatively impacting revenue growth in certain regions.
Akkodis Revenue Decline
Akkodis' revenues were 3% lower year-on-year on an organic constant currency basis, indicating challenges in certain segments like Germany.
Company Guidance
During the Adecco Group's Q3 2025 earnings call, the company reported a strong performance, highlighted by a 3.4% year-on-year increase in revenues to EUR 5.8 billion, on an organic trading days adjusted basis. The group gained significant market share, leading key competitors by 375 basis points overall and 300 basis points in Adecco. The U.S. market was particularly strong, with revenues increasing by 20% year-on-year. Gross profit reached EUR 1.1 billion, yielding a gross margin of 19.2%, which matched the company's guidance despite a year-on-year decrease of 10 basis points, but a sequential improvement of 30 basis points. EBITA, excluding one-offs, was EUR 195 million with a 3.4% margin, and adjusted EPS stood at EUR 0.67. Cash conversion was robust at 110%, with operating cash flow of EUR 200 million, up EUR 79 million from the previous year. The company remains focused on achieving a 3% EBITA margin floor for the full year, with expectations for Q4 revenue growth to align with Q3's performance on an organic basis.Adecco Group AG Financial Statement Overview
Summary
Adecco Group AG demonstrates strong revenue growth and a solid cash flow position, which are positive indicators for future performance. However, the company faces challenges in improving its profitability margins and managing its increasing leverage. While the balance sheet remains stable, careful attention to debt levels and operational efficiency will be crucial to sustaining growth and enhancing shareholder value.Income Statement
Adecco Group AG shows a mixed performance in its income statement. The TTM data indicates a revenue growth rate of 31.4%, which is a positive sign of recovery and expansion. However, the net profit margin is relatively low at 1.22%, indicating limited profitability. The gross profit margin and EBIT margin have slightly decreased over the years, suggesting pressure on operational efficiency. Overall, while revenue growth is strong, profitability remains a concern.Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.07 in the TTM, indicating moderate leverage. The return on equity is 8.23%, which is reasonable but shows a declining trend from previous years. The equity ratio is stable, suggesting a balanced capital structure. Overall, the balance sheet is solid, but the increasing leverage could pose a risk if not managed carefully.Cash Flow
Cash flow analysis shows a positive trend with a 21.2% growth in free cash flow in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.13, suggesting efficient cash conversion. The free cash flow to net income ratio is high at 0.80, reflecting strong cash flow relative to earnings. Overall, the cash flow position is robust, supporting the company's liquidity and operational needs.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 23.00B | 23.14B | 23.96B | 23.64B | 20.95B | 19.56B |
| Gross Profit | 4.41B | 4.50B | 4.97B | 4.97B | 4.28B | 3.79B |
| EBITDA | 708.00M | 760.00M | 841.00M | 770.00M | 971.00M | 307.00M |
| Net Income | 280.00M | 303.00M | 325.00M | 342.00M | 586.00M | -97.00M |
Balance Sheet | ||||||
| Total Assets | 11.79B | 12.10B | 12.43B | 13.26B | 11.87B | 9.79B |
| Cash, Cash Equivalents and Short-Term Investments | 342.00M | 482.00M | 556.00M | 782.00M | 3.05B | 1.49B |
| Total Debt | 3.54B | 3.48B | 3.67B | 3.70B | 3.48B | 2.29B |
| Total Liabilities | 8.49B | 8.51B | 8.83B | 9.36B | 8.06B | 6.57B |
| Stockholders Equity | 3.29B | 3.58B | 3.60B | 3.88B | 3.79B | 3.21B |
Cash Flow | ||||||
| Free Cash Flow | 503.00M | 563.00M | 347.00M | 328.00M | 590.00M | 563.00M |
| Operating Cash Flow | 628.00M | 707.00M | 563.00M | 543.00M | 722.00M | 720.00M |
| Investing Cash Flow | -149.00M | -157.00M | -209.00M | -1.45B | -206.00M | -162.00M |
| Financing Cash Flow | -352.00M | -634.00M | -620.00M | -1.38B | 980.00M | -290.00M |
Adecco Group AG Technical Analysis
Positive
14.67
Price Trends
14.48
Positive
14.56
Positive
14.56
Positive
Market Momentum
0.15
Negative
53.34
Neutral
32.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AHEXY, the sentiment is Positive. The current price of 14.67 is above the 20-day moving average (MA) of 14.45, above the 50-day MA of 14.48, and above the 200-day MA of 14.56, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 53.34 is Neutral, neither overbought nor oversold. The STOCH value of 32.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AHEXY.
Adecco Group AG Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.59B | 13.65 | 13.89% | 2.89% | 3.65% | 5.71% | |
71 Outperform | $4.88B | 15.82 | 8.57% | 4.22% | -2.35% | -3.74% | |
66 Neutral | $993.72M | 18.62 | 24.08% | 0.88% | 9.64% | 9.93% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $2.94B | 18.09 | 11.27% | 8.65% | -7.27% | -43.88% | |
54 Neutral | $1.71B | 101.15 | 16.04% | 6.37% | 3.19% | -86.21% | |
54 Neutral | $1.43B | -63.12 | -1.00% | 4.96% | -2.44% | -156.01% |
* Industrials Sector Average
AHEXY
Adecco Group AG
14.58
3.52
31.82%
BBSI
Barrett Business Services
38.79
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-8.19%
NSP
Insperity
44.74
-28.57
-38.97%
KFY
Korn Ferry
67.29
0.98
1.48%
MAN
ManpowerGroup
29.61
-25.40
-46.17%
RHI
Robert Half
27.86
-36.79
-56.91%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.