Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $419.95M
• Dividend Yield: 2.5%
• Average Volume (3M): 263.40K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.61
• Revenue Growth: -3.49%
• EPS Growth: -140.04%
• Country: US
• Employees: 5,570
• Sector: Industrials
• Sector Strength: 87
• Industry: Staffing & Employment Services
• EPS (TTM): 0.39
• Shares Outstanding: 31,907,118
• 10 Day Avg. Volume: 286,582
• 30 Day Avg. Volume: 263,400
• PEG Ratio: <0.01
• Price to Book (P/B): 0.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.38
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 0.04
• Enterprise Value/Gross Profit: 0.75
• Enterprise Value/Ebitda: 2.62
• 1Y Price Target: $26.00
• Price Target Upside: 125.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 51 Neutral
• Price Target: $11.50 ▼(-0.09%Downside)

Kelly Services' overall stock score is driven by financial and technical challenges, with declining revenue and weak market momentum. The earnings call and corporate events provide some optimism, but significant issues remain.

Positive Factors

Market Position

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

Revenue Performance

Kelly reported solid Q1/25 revenue of $1.165 billion that exceeded the consensus of $1.158 billion.

Segment Growth

Professional & Industrial segment revenue grew 4.4% year-over-year, reflecting continued traction of the segment’s omni-channel strategy.

Negative Factors

Earnings

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 Demand

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

IT Staffing Demand

Demand for IT staffing remained challenged, consistent with industry trends, as clients continued to take a cautious approach to initiating large technology deployments.

Kelly Services Business Overview & Revenue Model

Company Description

Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Professional & Industrial segment delivers staffing, outcome-based, and direct-hire services in the areas of office, professional, light industrial, and contact center specialties. The Science, Engineering & Technology segment offers staffing, outcome-based, and direct-hire services in the areas of science and clinical research, engineering, information technology, and telecommunications specialties. The Education segment provides staffing and executive search services to early childhood, and higher education markets. The Outsourcing & Consulting segment offers recruitment process outsourcing (RPO), payroll process outsourcing, and talent advisory services, as well as managed services. The International segment provides staffing, RPO, and direct-hire services in Europe and Mexico. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, the United Kingdom, Italy, Germany, Ireland, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.

How the Company Makes Money

Kelly Services generates revenue primarily through the provision of staffing and workforce solutions. The company earns money by placing temporary, temporary-to-hire, and permanent employees across various industries, charging clients for these placements. Revenue streams include fees from temporary staffing services, where Kelly charges clients a markup on the wages paid to temporary workers, and fees from direct-hire placements, where clients pay a percentage of the hired employee's first-year salary. Additionally, Kelly Services offers outsourcing and consulting services, providing human resource management and project-based services, which contribute to its revenue. Partnerships with companies and organizations seeking flexible workforce solutions also play a significant role in enhancing the company's earnings, as do its investments in technology and innovation to streamline operations and improve client and candidate experiences.

Kelly Services Financial Statement Overview

Summary

Kelly Services faces financial challenges with declining revenue, negative profitability, and moderate leverage. While cash flow generation remains strong, the company needs to address profitability issues and stabilize its revenue trajectory to improve its financial position.

Income Statement

Kelly Services shows a challenging income statement with a declining revenue trend and negative net income for the TTM (Trailing-Twelve-Months). The gross profit margin stands at 19.73%, indicating moderate profitability, but the net profit margin is negative at -0.46%, reflecting operational difficulties. The company also reports negative EBIT and EBITDA margins, suggesting issues with core profitability and operating efficiency.

Balance Sheet

The balance sheet reveals moderate financial health, with a debt-to-equity ratio of 0.21, indicating a conservative leverage position. The return on equity is negative due to net losses, but the equity ratio of 47.82% suggests a stable capital structure with adequate equity financing. Despite these strengths, the decline in stockholders' equity and total assets warrants attention.

Cash Flow

Cash flow analysis shows resilience with positive operating cash flow and free cash flow in the TTM (Trailing-Twelve-Months). The free cash flow to net income ratio is negative due to net losses, but the operating cash flow to net income ratio is favorable at 3.70, highlighting effective cash generation relative to earnings. However, significant fluctuations in investing and financing cash flows may pose risks.

Breakdown
TTM	Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
4.45B	4.33B	4.84B	4.97B	4.91B	4.52B
	Gross Profit
878.60M	882.60M	961.40M	1.01B	919.20M	827.60M
	EBIT
-16.80M	-15.10M	24.30M	142.20M	48.60M	137.60M
	EBITDA
24.60M	39.90M	78.20M	-13.40M	241.10M	-59.10M
	Net Income Common Stockholders
-20.60M	-600.00K	36.40M	-63.30M	156.10M	-72.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
223.00M	39.00M	125.80M	153.70M	112.70M	223.00M
	Total Assets
2.56B	2.63B	2.58B	2.66B	2.89B	2.56B
	Total Debt
87.40M	302.60M	51.30M	70.40M	78.90M	87.40M
	Net Debt
-135.60M	263.60M	-74.50M	-83.30M	-33.80M	-135.60M
	Total Liabilities
1.36B	1.40B	1.33B	1.41B	1.56B	1.36B
	Stockholders Equity
1.20B	1.23B	1.25B	1.25B	1.34B	1.20B
Cash Flow		Free Cash Flow
66.40M	15.80M	61.40M	-88.30M	73.80M	170.50M
	Operating Cash Flow
76.30M	26.90M	76.70M	-76.30M	85.00M	186.00M
	Investing Cash Flow
-430.50M	-361.60M	-14.10M	167.50M	-180.70M	9.80M
	Financing Cash Flow
180.00M	214.80M	-59.60M	-50.60M	-8.10M	-8.10M

Kelly Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.51
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KELYA, the sentiment is Negative. The current price of 11.51 is below the 20-day moving average (MA) of 11.92, below the 50-day MA of 11.74, and below the 200-day MA of 14.91, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 42.07 is Neutral, neither overbought nor oversold. The STOCH value of 41.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KELYA.

Kelly Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$4.51B	12.22	5.40%	3.63%	4.14%	-12.01%
HSII	64 Neutral	$910.41M	127.20	1.71%	1.36%	6.17%	-85.16%
HQI	63 Neutral	$142.10M	40.64	5.67%	2.36%	-7.66%	-34.08%
MHH	61 Neutral	$75.18M	37.89	2.52%	―	3.93%	―
KELYA	51 Neutral	$419.95M	11.43	-1.60%	2.50%	-3.49%	-140.04%
TBI	50 Neutral	$194.71M	―	-36.98%	―	-16.76%	-1127.93%
ZIP	48 Neutral	$535.12M	225.24	-2897.28%	―	-20.95%	-152.29%

Kelly Services Corporate Events

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.

Kelly Services Approves 2025 Equity Incentive Plan

On May 8, 2025, Kelly Services, Inc. held its annual stockholders meeting virtually, where the 2025 Equity Incentive Plan was approved. The meeting also saw the election of board members, approval of executive compensation, and ratification of PricewaterhouseCoopers LLP as the independent auditor for 2025, indicating strong shareholder support for the company’s strategic initiatives.