Kelly Services (KELYA)
NASDAQ:KELYA
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Kelly Services
(NASDAQ:KELYA)
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Rating:56Neutral
Price Target:
$9.00
▲(2.51% Upside)
Action:ReiteratedDate:02/14/26
The score is anchored by mixed fundamentals: strong 2025 operating/free cash flow and manageable leverage are meaningful positives, but are offset by declining revenue and a large 2025 loss. Technicals are neutral-to-weak with the stock below key longer-term moving averages. Valuation gets modest support from the ~3% dividend, while the latest guidance points to near-term pressure with a path to improvement later in 2026.
Positive Factors
Strong cash generation
Kelly produced materially positive operating cash flow (~$123M) and free cash flow (~$114M) in 2025 despite a reported loss. Durable cash conversion gives the company flexibility to fund operations, invest in tech/AI, pay the dividend and buy back stock, reducing liquidity risk during a multi-quarter recovery.
Negative Factors
Multi-year revenue drift lower
Kelly’s revenue trend has been downward for several years, with a roughly 5% decline in 2025. For a staffing firm, persistent revenue erosion weakens operating leverage, limits scale benefits, and forces reliance on cost cuts and nonrecurring actions to sustain margins over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Kelly produced materially positive operating cash flow (~$123M) and free cash flow (~$114M) in 2025 despite a reported loss. Durable cash conversion gives the company flexibility to fund operations, invest in tech/AI, pay the dividend and buy back stock, reducing liquidity risk during a multi-quarter recovery.
Read all positive factors
Kelly Services (KELYA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$313.30M
Dividend Yield3.53%
Average Volume (3M)422.64K
Price to Earnings (P/E)―
Beta (1Y)0.81
Revenue Growth0.46%
EPS Growth-477.90%
CountryUS
Employees5,570
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.16
Shares Outstanding30,915,586
10 Day Avg. Volume438,476
30 Day Avg. Volume422,644
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.31
Price to Sales (P/S)0.07
P/FCF Ratio2.67
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue0.10
Enterprise Value/Gross Profit0.50
Enterprise Value/Ebitda-58.42
Forecast
1Y Price Target
$16.00Price Target Upside82.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1
Revenue Forecast (FY)$4.13B
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...
How the Company Makes Money
Kelly primarily makes money by supplying labor to client companies and charging fees tied to that workforce engagement. The largest revenue stream is typically contract/temporary staffing: Kelly recruits and places workers at client sites, then bi...
Kelly Services Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: notable operational and strategic progress (technology modernization, enterprise AI deployment, Education growth, improved liquidity, SG&A reductions, leadership hires, and meaningful wins) but material near-term financial headwinds (double-digit Q4 revenue decline, significant gross profit and EBITDA margin pressure, healthcare/workers' comp cost increases, large discrete customer impacts, and substantial tax/impairment charges). Management expects sequential improvement through 2026 as discrete impacts anniversary and technology/AI and go-to-market initiatives take hold.Positive Updates
Technology Modernization and AI Deployment
Completed December cutover of SET acquisitions to the modernized MRP platform; majority of Kelly businesses expected to be operational on the unified platform by 2027. Launched Grace Boost (proprietary internal AI) to all employees and integrated AI into day-to-day applications. Deployed an AI recruiting solution for a large multinational manufacturing customer with improved talent feedback, higher customer satisfaction, faster staffing, and lower cost; management cited these as scalable and repeatable wins.
Negative Updates
Quarterly and Full-Year Revenue Declines
Q4 revenue of $1,100,000,000 decreased 11.9% year-over-year; on an underlying basis (excluding discrete impacts) Q4 revenue was down 3.9%. Full-year revenue totaled $4,250,000,000, down 1.9% overall (roughly flat excluding acquisitions and discrete impacts). Management expects Q1 revenue to decline 11–13% YoY (or an underlying decline of 3–5%) and full-year revenue to be roughly mid-single-digit down.
Read all updates
Q4-2025 Updates
Positive
Negative
Technology Modernization and AI Deployment
Completed December cutover of SET acquisitions to the modernized MRP platform; majority of Kelly businesses expected to be operational on the unified platform by 2027. Launched Grace Boost (proprietary internal AI) to all employees and integrated AI into day-to-day applications. Deployed an AI recruiting solution for a large multinational manufacturing customer with improved talent feedback, higher customer satisfaction, faster staffing, and lower cost; management cited these as scalable and repeatable wins.
Read all positive updates
Company Guidance
Kelly’s guidance for 2026 assumes no material change in the macro environment and that discrete federal and three large‑customer impacts will persist into Q3/Q4; management expects Q1 revenue to decline 11–13% year‑over‑year (or an underlying decline of 3–5% excluding those discrete impacts) with adjusted EBITDA margin of ~1.5% (impacted by a payroll‑tax reset), followed by sequential quarter‑on‑quarter improvement that should produce modest revenue growth in H2 and a full‑year roughly mid‑single‑digit revenue decline, with measurable adjusted EBITDA margin expansion in H2 and a modest full‑year margin increase; for context, FY2025 revenue was $4.25B (Q4 $1.10B, Q4 revenue down 11.9% YoY or down 3.9% underlying), FY25 adjusted EBITDA was $21M (2% margin), adjusted EPS was $1.26, operating cash flow was $122.6M, available liquidity $288M, and total borrowings $102M.Kelly Services Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
58
Neutral
Cash Flow
71
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.25B | 4.33B | 4.84B | 4.97B | 4.91B |
| Gross Profit | 853.00M | 882.60M | 961.40M | 1.01B | 919.20M |
| EBITDA | 101.70M | 39.90M | 99.20M | 103.40M | 82.40M |
| Net Income | -254.10M | -600.00K | 36.40M | -62.50M | 156.10M |
Balance Sheet | |||||
| Total Assets | 2.25B | 2.63B | 2.58B | 2.66B | 2.89B |
| Cash, Cash Equivalents and Short-Term Investments | 33.00M | 39.00M | 125.80M | 153.70M | 112.70M |
| Total Debt | 159.10M | 302.60M | 51.30M | 70.40M | 78.90M |
| Total Liabilities | 1.27B | 1.40B | 1.33B | 1.41B | 1.56B |
| Stockholders Equity | 976.50M | 1.23B | 1.25B | 1.25B | 1.34B |
Cash Flow | |||||
| Free Cash Flow | 114.10M | 15.80M | 61.40M | -88.30M | 73.80M |
| Operating Cash Flow | 122.60M | 26.90M | 76.70M | -76.30M | 85.00M |
| Investing Cash Flow | 22.30M | -361.60M | -14.10M | 167.50M | -180.70M |
| Financing Cash Flow | -161.10M | 214.80M | -59.60M | -50.60M | -8.10M |
Kelly Services Technical Analysis
Negative
8.78
Price Trends
9.57
Negative
9.22
Negative
10.93
Negative
Market Momentum
-0.22
Negative
44.07
Neutral
63.00
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 8.78 is below the 20-day moving average (MA) of 8.85, below the 50-day MA of 9.57, and below the 200-day MA of 10.93, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 44.07 is Neutral, neither overbought nor oversold. The STOCH value of 63.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KELYA.
Kelly Services Risk Analysis
Kelly Services disclosed 33 risk factors in its most recent earnings report. Kelly Services reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kelly Services Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $739.96M | 16.87 | 23.66% | 0.88% | 9.64% | 9.93% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $313.30M | -1.20 | -22.10% | 3.53% | 0.46% | -477.90% | |
55 Neutral | $518.36M | 15.78 | 26.32% | 5.12% | -5.91% | -23.01% | |
51 Neutral | $1.32B | -104.17 | -0.65% | 4.96% | -2.44% | -156.01% | |
44 Neutral | $99.51M | -2.93 | -16.17% | ― | -5.37% | 75.32% | |
44 Neutral | $145.19M | -10.62 | 57.25% | ― | -10.14% | -1381.34% |
* Industrials Sector Average
KELYA
Kelly Services
8.78
-4.02
-31.42%
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Kelly Services Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Kelly Services shifts control to Hunt with new board
Neutral
Jan 30, 2026
On January 30, 2026, Kelly Services entered into a letter agreement with Hunt Equity Opportunities, LLC, an indirect subsidiary of Hunt Companies, to amend and effectively terminate its stockholder rights plan in connection with Hunt’s purch...
Business Operations and StrategyRegulatory Filings and Compliance
Kelly Services Adopts Stockholder Rights Plan Amid Control Shift
Neutral
Jan 12, 2026
On January 11, 2026, Kelly Services’ board of directors adopted a stockholder rights plan in response to notice from the Terence E. Adderley Revocable Trust K on January 9, 2026 that it had entered into a definitive agreement to sell its 92....
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.
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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.