Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $497.40M
• Dividend Yield: 2.14%
• Average Volume (3M): 318.86K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.75
• Revenue Growth: 0.97%
• EPS Growth: -112.75%
• Country: US
• Employees: 5,570
• Sector: Industrials
• Sector Strength: 78
• Industry: Staffing & Employment Services
• EPS (TTM): 0.54
• Shares Outstanding: 31,955,845
• 10 Day Avg. Volume: 407,437
• 30 Day Avg. Volume: 318,858
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 0.12
• Enterprise Value/Gross Profit: 0.59
• Enterprise Value/Ebitda: 14.21
• 1Y Price Target: $22.17
• Price Target Upside: 58.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 51 Neutral
• Price Target: $14.50 ▲(3.35% Upside)

Kelly Services' overall score reflects strong revenue growth but significant challenges in profitability and valuation. The stable balance sheet and improving cash flow are positive, yet the lack of technical indicators and negative P/E ratio weigh on the score. The earnings call and corporate events suggest potential for future improvement.

Positive Factors

Financial Performance

Q4/24 revenue of $1.191 billion exceeded the estimate of $1.157 billion and the consensus of $1.153 billion.

Market Position

Kelly continued to gain market share and outperform the broader market.

Segment Growth

Organic revenue continued to benefit from strong performance by the Education segment, which grew 12.1% year-over-year in Q4/24 due to improved staffing fill rates, higher bill rates, and new customer wins.

Negative Factors

Earnings Decline

Q1/25 adjusted EPS of $0.39 declined from $0.56 in the year-ago quarter due primarily to a $0.15 per share increase in net interest expense.

Government Spending

Reduced demand from the federal government due to spending cutbacks was an 80 basis point headwind to organic revenue growth in Q1/25.

Revenue Headwind

Greater-than-expected organic revenue headwind was attributed to reduced demand from three large customers, primarily due to economic uncertainty.

Kelly Services Business Overview & Revenue Model

Company Description

Kelly Services, Inc. (KELYA) is a global leader in workforce solutions, specializing in providing staffing services across various sectors including information technology, engineering, education, and administrative support. Founded in 1946, the company offers a range of services such as temporary staffing, direct-hire recruitment, and outsourcing solutions, catering to both employers seeking talent and individuals seeking employment opportunities. Kelly Services is committed to innovation in workforce management and plays a crucial role in connecting skilled professionals with businesses that require their expertise.

How the Company Makes Money

Kelly Services generates revenue primarily through the placement of temporary and permanent staff in client organizations. The company charges fees based on a markup of the employee's hourly wage or a percentage of the employee's annual salary for permanent placements. Key revenue streams include the staffing services for various sectors, managed service provider (MSP) solutions, and recruitment process outsourcing (RPO). Additionally, Kelly Services has established strategic partnerships with various organizations to enhance its service offerings and expand its market reach, contributing to its overall earnings. The company also benefits from a diverse client base, reducing dependency on any single sector or customer.

Kelly Services Financial Statement Overview

Summary

Kelly Services shows strong revenue growth but struggles with profitability and operational efficiency. The balance sheet is stable with low leverage, but negative returns on equity are concerning. Cash flow is improving, yet not translating into consistent profitability.

Income Statement

Kelly Services shows a mixed performance in its income statement. The company has experienced a significant revenue growth rate of 99.5% in the TTM period, indicating strong top-line growth. However, profitability metrics such as the net profit margin and EBIT margin are negative, reflecting ongoing challenges in achieving operational efficiency. The gross profit margin remains stable, but the negative net income suggests that cost management needs improvement.

Balance Sheet

The balance sheet of Kelly Services is relatively stable, with a low debt-to-equity ratio of 0.106 in the TTM period, indicating conservative leverage. However, the return on equity is negative, which is a concern for shareholders. The equity ratio remains healthy, suggesting a solid capital structure, but the company needs to improve its profitability to enhance shareholder returns.

Cash Flow

The cash flow statement shows a positive trend in free cash flow growth, with a significant increase of 58.3% in the TTM period. The operating cash flow to net income ratio is positive, indicating that the company is generating cash from its operations despite negative net income. However, the free cash flow to net income ratio suggests that cash generation is not yet translating into profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.50B	4.33B	4.84B	4.97B	4.91B	4.52B
Gross Profit	902.40M	882.60M	961.40M	1.01B	919.20M	827.60M
EBITDA	37.20M	39.90M	78.20M	-13.40M	241.10M	-59.10M
Net Income	-6.20M	-600.00K	36.40M	-63.30M	156.10M	-72.80M
Balance Sheet
Total Assets	2.51B	2.63B	2.58B	2.66B	2.89B	2.56B
Cash, Cash Equivalents and Short-Term Investments	18.00M	39.00M	125.80M	153.70M	112.70M	223.00M
Total Debt	133.90M	302.60M	51.30M	70.40M	78.90M	87.40M
Total Liabilities	1.25B	1.40B	1.33B	1.41B	1.56B	1.36B
Stockholders Equity	1.27B	1.23B	1.25B	1.25B	1.34B	1.20B
Cash Flow
Free Cash Flow	105.10M	15.80M	61.40M	-88.30M	73.80M	170.50M
Operating Cash Flow	114.00M	26.90M	76.70M	-76.30M	85.00M	186.00M
Investing Cash Flow	16.20M	-361.60M	-14.10M	167.50M	-180.70M	9.80M
Financing Cash Flow	-159.50M	214.80M	-59.60M	-50.60M	-8.10M	-8.10M

Kelly Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KELYA, the sentiment is Positive. The current price of 14.03 is above the 20-day moving average (MA) of 13.19, above the 50-day MA of 12.48, and above the 200-day MA of 13.25, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 61.97 is Neutral, neither overbought nor oversold. The STOCH value of 81.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KELYA.

Kelly Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSII	69 Neutral	$993.89M	30.16	7.18%	1.26%	8.89%	-13.57%
Sector *	63 Neutral	$10.80B	16.80	6.58%	2.07%	2.49%	-15.77%
HQI	58 Neutral	$130.00M	53.45	4.06%	2.60%	-9.76%	-53.41%
MHH	56 Neutral	$89.38M	109.45	1.01%	―	5.16%	―
KELYA	51 Neutral	$497.40M	11.43	-0.49%	2.14%	0.97%	-112.75%
TBI	48 Neutral	$174.02M	―	-10.53%	―	-13.01%	68.18%
ZIP	44 Neutral	$384.19M	225.24	-2897.28%	―	-16.20%	-222.75%

Kelly Services Corporate Events

Kelly Services Appoints New Chief Accounting Officer

On August 7, 2025, Kelly Services announced the appointment of Nicholas A. Zuhlke as Vice President, Controller, and Chief Accounting Officer, effective August 11, 2025, succeeding Laura Lockhart. Zuhlke brings extensive experience from his previous roles at DexKo Global Holdings Inc. and other companies. In its second-quarter earnings report, Kelly Services reported a 4.2% year-over-year revenue increase to $1.1 billion, primarily due to acquisitions, despite a 3.3% organic decline. The company experienced a decrease in operating earnings and adjusted EBITDA compared to the previous year, with expectations of a revenue decline in Q3 due to reduced demand from U.S. federal contractors. Kelly remains focused on growth in resilient markets and aligning resources with demand, aiming for future margin improvements.

The most recent analyst rating on (KELYA) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.

Kelly Services Appoints Christopher Layden as New CEO

On August 7, 2025, Kelly Services announced the appointment of Christopher Layden as the new President and CEO, effective September 2, 2025, succeeding Peter Quigley, who will retire but remain as a strategic advisor and board member until May 2026. Layden, previously COO at Prolink, brings extensive experience in workforce solutions and is expected to drive Kelly’s strategic evolution, focusing on profitable growth and value creation, building on the progress made under Quigley’s leadership.

The most recent analyst rating on (KELYA) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.

Kelly Services Unveils Strategic Initiatives and Growth Plan

On May 22, 2025, Kelly Services posted an investor presentation on its website, outlining its strategic initiatives and financial performance. The company has streamlined its operations to focus on higher-margin, higher-growth markets, resulting in a significant expansion of its EBITDA margin. Kelly Services has also realigned its business segments to enhance efficiency and effectiveness, aiming to capture shareholder value through its specialty growth strategy. The company has achieved structural savings and monetized non-core assets, positioning itself for long-term value creation for stakeholders.

The most recent analyst rating on (KELYA) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.