HireQuest (HQI) AI Stock Analysis

• Market Cap: $145.60M
• Dividend Yield: 2.31%
• Average Volume (3M): 18.16K
• Price to Earnings (P/E): 39.4
• Beta (1Y): 0.56
• Revenue Growth: -8.67%
• EPS Growth: -40.72%
• Country: US
• Employees: 92
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 0.26
• Shares Outstanding: 14,000,000
• 10 Day Avg. Volume: 14,763
• 30 Day Avg. Volume: 18,157
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.09
• Price to Cash Flow (P/CF): 11.10
• P/FCF Ratio: 10.70
• 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: $16.00
• Price Target Upside: 53.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

HireQuest's overall stock score of 64 reflects a mixed financial performance, with strong cash flow and balance sheet strength offset by declining income margins and inconsistent revenue growth. Technical indicators signal a bearish trend, and the stock appears overvalued based on its P/E ratio, despite a reasonable dividend yield. The earnings call provided some optimism with profitability and cost management improvements, but challenges remain in revenue and sales declines. Investors should consider these factors when evaluating the stock.

Positive Factors

Earnings Performance

Q4/24 adjusted EPS of $0.19 increased slightly from $0.18 a year ago, which matched the consensus and exceeded the estimate of $0.17.

Profitability Increase

Q3/24 adjusted EBITDA increased 32% YOY to $4.9 million, marking the highest quarterly adjusted EBITDA since Q3/22.

Revenue Growth

Q3/24 results exceed estimates with total revenue increasing 1.6% YOY to $9.4 million, surpassing both internal and consensus estimates.

Negative Factors

Impairment Charge Impact

HireQuest reported a GAAP net loss per share of ($0.16) for Q3/24 due to a one-time non-cash impairment charge for the acquired MRINetwork assets.

Revenue Decline

Franchise royalty fees accounted for 95% of Q4/24 revenue and declined -14% YOY to $7.6 million, coming in lower than the estimate of $8.7 million.

Sales Performance

System-wide sales from executive search and permanent placement continued to be soft, declining 20.6% YOY in Q4/24 and 18.6% YOY in full-year 2024.

HireQuest Business Overview & Revenue Model

Company Description

HireQuest, Inc. provides temporary staffing solutions in the United States. The company provides temporary staffing services, including skilled and semi-skilled labor and industrial personnel, clerical and administrative personnel, and construction personnel. As of December 31, 2021, the company had a network of approximately 216 franchisee-owned offices in 36 states and the District of Columbia. In addition, the company specializes in commercial drivers. It serves customers primarily in the construction, industrial/manufacturing, warehousing, hospitality, recycling/waste management, disaster recovery, logistics, auctioneering, construction, landscaping, and retail industries. The company was formerly known as Command Center, Inc. and changed its name to HireQuest, Inc. in September 2019.HireQuest, Inc. was founded in 2002 and is headquartered in Goose Creek, South Carolina.

How the Company Makes Money

HireQuest generates revenue primarily through its franchising model, where it licenses its brand and business systems to independent operators who run local staffing offices. The company earns money by receiving royalty fees from these franchisees, typically based on a percentage of the franchisee's gross billings. Additionally, HireQuest may earn revenue from providing back-office support services, such as payroll processing and risk management, to its franchisees. Significant growth in revenue can be attributed to strategic acquisitions and expanding its franchise network, which increases the company's geographical footprint and market reach.

HireQuest Financial Statement Overview

Summary

HireQuest demonstrates a solid financial foundation with strong cash flows and a healthy balance sheet. While the income statement shows some weaknesses with declining margins and inconsistent revenue growth, the company's low leverage and efficient cash management are notable strengths. Maintaining profitability and revenue growth will be key areas to focus on to enhance overall financial performance.

Income Statement

The income statement shows a mixed performance. Gross profit margins are strong as gross profit equals total revenue, indicating no cost of goods sold. However, net profit margin has decreased from prior years, going from 43.3% in 2020 to 10.6% in 2024, suggesting rising operating costs or other expenses. Revenue growth has been inconsistent, with fluctuations over the years, notably decreasing by 8.7% from 2023 to 2024. EBIT and EBITDA margins have also seen a decline, reflecting challenges in maintaining operational efficiency.

Balance Sheet

The balance sheet is relatively strong, with a healthy equity ratio of 68.9% in 2024, indicating a stable financial structure. The debt-to-equity ratio improved significantly from prior years, dropping to 0.11 in 2024 from higher levels, showing reduced financial leverage. However, the return on equity has decreased to 5.7% in 2024 from higher levels in previous years, signaling a decline in profitability efficiency.

Cash Flow

Cash flow analysis reveals robust operating cash flow, with a significant free cash flow generation of $12.2 million in 2024. The operating cash flow to net income ratio is strong at 3.35, indicating efficient cash conversion. The free cash flow growth has been positive, although the pace has slowed, reflecting potential challenges in sustaining growth. Overall, cash flow management appears solid, providing a cushion for future investments or downturns.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
36.28M	34.60M	37.88M	30.95M	22.76M	13.81M
	Gross Profit
34.19M	34.60M	37.88M	28.91M	22.59M	13.81M
	EBIT
7.17M	4.37M	10.64M	16.04M	7.66M	4.98M
	EBITDA
4.90M	5.76M	11.65M	16.28M	9.20M	6.71M
	Net Income Common Stockholders
1.47M	3.67M	6.13M	12.46M	11.85M	5.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
53.56K	2.22M	1.34M	3.05M	1.26M	13.67M
	Total Assets
9.16M	94.01M	103.83M	103.28M	77.35M	49.10M
	Total Debt
913.15K	6.83M	14.77M	16.54M	3.24M	0.00
	Net Debt
859.58K	4.61M	13.42M	13.49M	1.98M	-13.67M
	Total Liabilities
10.75M	29.21M	41.09M	45.03M	30.62M	12.73M
	Stockholders Equity
-1.58M	64.80M	62.73M	58.25M	46.73M	36.36M
Cash Flow		Free Cash Flow
11.78M	12.22M	10.13M	15.40M	15.41M	9.12M
	Operating Cash Flow
12.22M	12.29M	10.62M	16.88M	17.38M	10.88M
	Investing Cash Flow
-6.84M	44.00K	-7.08M	-23.57M	-29.45M	36.37K
	Financing Cash Flow
-4.87M	-11.21M	-5.24M	8.49M	-347.17K	-1.44M

HireQuest Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HQI, the sentiment is Negative. The current price of 10.4 is below the 20-day moving average (MA) of 11.04, below the 50-day MA of 12.77, and below the 200-day MA of 13.45, indicating a bearish trend. The MACD of -0.65 indicates Negative momentum. The RSI at 32.29 is Neutral, neither overbought nor oversold. The STOCH value of 39.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HQI.

HireQuest Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HQI	64 Neutral	$145.60M	39.42	6.15%	2.31%	-8.67%	-40.72%
MHH	63 Neutral	$90.27M	27.11	4.03%	―	-1.07%	―
Sector *	63 Neutral	$4.27B	11.40	5.38%	214.63%	4.11%	-8.98%
DHX	53 Neutral	$68.46M	331.11	0.23%	―	-6.55%	-93.52%
BGSF	50 Neutral	$37.66M	―	-3.98%	4.41%	-12.99%	-152.96%
TBI	47 Neutral	$127.90M	―	-32.53%	―	-17.78%	-820.48%
JOB	45 Neutral	$20.97M	―	-24.47%	―	-21.17%	-441.21%

HireQuest Corporate Events

HireQuest Announces CFO Retirement and Successor

On April 8, 2025, HireQuest, Inc. announced the retirement of its Chief Financial Officer, Steve Crane, effective May 31, 2025. David Hartley, who has been with the company since 2020 and currently serves as Vice President of Operational Finance and Corporate Development, will succeed Crane. Hartley’s appointment is part of a planned transition, with Crane assisting in the process to ensure continuity. The company believes Hartley’s experience and leadership will support its growth strategy and shareholder value.

Spark’s Take on HQI Stock

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

HireQuest’s overall score reflects a solid financial position with strengths in cash flow and balance sheet health. However, declining revenue and profitability margins, coupled with bearish technical indicators and a high valuation, weigh down the score. The company’s strategic moves to reduce costs and maintain profitability are positive, as is its dividend declaration, but challenges in the staffing market and revenue decline remain key risks.

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

HireQuest Declares Quarterly Cash Dividend for 2025

On February 18, 2025, HireQuest, Inc. announced that its Board of Directors declared a quarterly cash dividend of $0.06 per share, payable on March 17, 2025, to shareholders recorded by March 3, 2025. This move reflects HireQuest’s commitment to returning value to shareholders, although the declaration of future dividends will depend on the company’s financial performance, cash flow, and compliance with legal and financial regulations.