Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $402.45M
• Dividend Yield: 3.2%
• Average Volume (3M): 268.94K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.77
• Revenue Growth: 0.46%
• EPS Growth: -477.90%
• Country: US
• Employees: 5,570
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 0.18
• Shares Outstanding: 31,955,845
• 10 Day Avg. Volume: 251,950
• 30 Day Avg. Volume: 268,943
• PEG Ratio: 8.08
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.11
• P/FCF Ratio: 31.32
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $26.00
• Price Target Upside: 177.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 47 Neutral
• Price Target: $11.00 ▲(17.52% Upside)

Kelly Services faces significant challenges, with strong revenue growth overshadowed by poor profitability and bearish technical indicators. The negative P/E ratio and recent earnings call highlight ongoing struggles, though the dividend yield offers some investor value. The company's focus on restructuring and technology modernization is a positive step, but the overall outlook remains cautious.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for services and effective market penetration, supporting long-term business expansion.

Cash Flow Improvement

Improved cash flow enhances financial flexibility, enabling strategic investments and debt management, crucial for sustainable growth.

Low Leverage

Low leverage reduces financial risk, providing a solid foundation for future growth and resilience against economic fluctuations.

Negative Factors

Profitability Challenges

Negative profitability metrics highlight operational inefficiencies, which could hinder long-term financial performance and shareholder returns.

Revenue Decline

Significant revenue decline due to reduced demand from key customers may impact market position and long-term growth prospects.

Goodwill Impairment

Goodwill impairment reflects declining business performance and may indicate challenges in maintaining asset value and future earnings potential.

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 demonstrates strong revenue growth but struggles with profitability and operational efficiency. The balance sheet is stable with low leverage, yet negative returns on equity are concerning. Cash flow generation is improving, but translating this into consistent profitability remains a challenge.

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 2019	Dec 2018	Dec 2017
Income Statement
Total Revenue	3.30B	4.33B	4.84B	5.36B	5.51B	5.37B
Gross Profit	683.70M	882.60M	961.40M	968.40M	972.20M	954.10M
EBITDA	74.50M	39.90M	78.20M	173.60M	19.50M	107.10M
Net Income	25.60M	-600.00K	36.40M	112.40M	22.90M	71.60M
Balance Sheet
Total Assets	2.51B	2.63B	2.58B	2.48B	2.31B	2.38B
Cash, Cash Equivalents and Short-Term Investments	18.00M	39.00M	125.80M	25.80M	35.30M	33.30M
Total Debt	133.90M	302.60M	51.30M	65.30M	2.20M	10.20M
Total Liabilities	1.25B	1.40B	1.33B	1.22B	1.15B	1.22B
Stockholders Equity	1.27B	1.23B	1.25B	1.26B	1.16B	1.15B
Cash Flow
Free Cash Flow	92.10M	15.80M	61.40M	82.20M	35.80M	47.40M
Operating Cash Flow	99.00M	26.90M	76.70M	102.20M	61.40M	70.30M
Investing Cash Flow	22.30M	-361.60M	-14.10M	-94.30M	-29.80M	-59.30M
Financing Cash Flow	-157.00M	214.80M	-59.60M	-16.10M	-26.50M	-3.40M

Kelly Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 9.36 is below the 20-day moving average (MA) of 11.93, below the 50-day MA of 12.86, and below the 200-day MA of 12.67, indicating a bearish trend. The MACD of -0.62 indicates Positive momentum. The RSI at 15.28 is Positive, neither overbought nor oversold. The STOCH value of 11.97 is Positive, 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
KFRC	66 Neutral	$587.36M	14.11	27.19%	6.13%	-5.91%	―
BBSI	65 Neutral	$1.03B	19.80	24.08%	0.92%	9.64%	9.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TBI	49 Neutral	$164.37M	-5.79	-8.91%	―	-5.37%	75.32%
KELYA	47 Neutral	$402.45M	―	-0.49%	3.20%	0.46%	-477.90%
MAN	46 Neutral	$1.38B	―	-1.00%	7.90%	-2.44%	-156.01%
ZIP	45 Neutral	$354.57M	―	―	―	-10.14%	-1381.34%

Kelly Services Corporate Events

Kelly Services Reports Q3 2025 Earnings Decline

Kelly Services, Inc., a prominent player in the staffing industry, specializes in providing talent solutions across various sectors including science, engineering, technology, education, and more. Headquartered in Troy, Michigan, the company connects over 400,000 people with work annually through its extensive network of suppliers and partners.

Kelly Services’ Earnings Call: Mixed Outlook with Strategic Shifts

Kelly Services’ recent earnings call presented a mixed sentiment, reflecting both positive strides and significant challenges. The company reported growth in its Education and SET segments and improvements in gross profit margins. However, these positives were offset by revenue declines in the ETM segment, reduced earnings per share, and significant demand reductions from large customers. These challenges were largely attributed to macroeconomic conditions and specific cost-reduction initiatives by customers. A strategic CEO transition was also highlighted, aimed at driving future growth.

Kelly Services Reports Q2 2025 Earnings Growth

Kelly Services, Inc., a prominent player in the staffing industry, specializes in providing talent solutions across various sectors, including education, engineering, and technology. In its latest earnings report for the second quarter of 2025, Kelly Services reported a revenue of $1.1 billion, marking a 4.2% increase year-over-year, primarily driven by acquisitions. However, the company experienced a 3.3% decline in organic revenue. Operating earnings stood at $22.2 million, with adjusted earnings at $24.6 million, reflecting a 12.1% decrease compared to the previous year. The adjusted EBITDA was $37.0 million, down 8.7% from the prior year, with a margin decrease of 40 basis points to 3.4%. Despite these challenges, Kelly Services saw growth in its Education segment and maintained a focus on aligning resources with demand. Looking ahead, the company anticipates a revenue decline of 5% to 7% in the third quarter due to reduced demand from U.S. federal contractors and certain large customers. However, it expects an expansion in adjusted EBITDA margin by 80 to 90 basis points in the same period, with modest margin improvement for the full year.

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.