Kelly Services (KELYA)
NASDAQ:KELYA
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Kelly Services
(NASDAQ:KELYA)
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Rating:56Neutral
Price Target:
$10.00
▲(5.15% Upside)
Action:ReiteratedDate:05/09/26
The score is held back primarily by materially weakened financial performance (steep revenue declines and TTM losses), partially offset by manageable leverage and still-positive TTM free cash flow. Technicals show improving near-term momentum but not a full long-term trend reversal (below 200 DMA). Valuation is mixed—an attractive dividend yield, but losses (negative P/E) raise uncertainty. The latest earnings call supports a moderate uplift due to credible cost actions and guidance for sequential margin improvement, though near-term demand pressure and ongoing charges remain key risks.
Positive Factors
Healthy balance sheet / low leverage
Kelly's low reported leverage (debt-to-equity ~0.19) and substantial equity base provide durable financial flexibility to fund multi-quarter restructuring, support dividend continuity, invest in technology, and absorb customer volatility without immediate refinancing stress.
Negative Factors
Multi-year revenue contraction
A multi-year top-line decline and a sharp TTM revenue drop reduce scale economics in staffing. Shrinking revenue pressures gross profit pools, limits fixed-cost absorption, and increases dependency on new wins to restore sustainable organic growth and margin recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Healthy balance sheet / low leverage
Kelly's low reported leverage (debt-to-equity ~0.19) and substantial equity base provide durable financial flexibility to fund multi-quarter restructuring, support dividend continuity, invest in technology, and absorb customer volatility without immediate refinancing stress.
Read all positive factors
Kelly Services (KELYA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$357.54M
Dividend Yield3.53%
Average Volume (3M)395.94K
Price to Earnings (P/E)―
Beta (1Y)0.88
Revenue Growth-7.30%
EPS Growth-1239.34%
CountryUS
Employees5,570
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)-7.58
Shares Outstanding30,915,586
10 Day Avg. Volume437,899
30 Day Avg. Volume395,943
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 Cap1.40
Enterprise Value/Revenue0.12
Enterprise Value/Gross Profit0.62
Enterprise Value/Ebitda-19.63
Forecast
1Y Price Target
$16.00Price Target Upside68.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.89
Revenue Forecast (FY)$4.06B
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:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: clear near-term headwinds with meaningful YoY declines in revenue, gross profit and adjusted EPS, and some ongoing charges and working-capital-driven cash usage. Offsetting these negatives are tangible operational responses — significant SG&A reductions, technology modernization progress (CRM and platform migrations), a major MSP win driven by AI-enabled capabilities, a strengthened growth office and a credible outlook for sequential improvement and margin expansion in H2 2026. Given the mix of material negatives and concrete corrective actions with a credible recovery path, the tone is cautiously constructive but not yet decisively positive.Positive Updates
Top-Line Performance vs Expectations
Total company revenue of $1.0 billion for Q1 2026, which exceeded management's expectations despite a reported year-over-year decline of 10.7%. On an underlying basis (excluding discrete impacts from federal government and three large ETM customers), revenue declined 3.3% YoY, an improvement of 60 basis points versus the prior quarter.
Negative Updates
Significant Year-Over-Year Revenue and Gross Profit Declines
Reported revenue declined 10.7% YoY to $1.0 billion and reported gross profit fell 17% YoY to $196.4 million. Gross profit rate was 18.9%, a decline of 140 basis points YoY (approximately 50 bps of which is timing-related).
Read all updates
Q1-2026 Updates
Positive
Negative
Top-Line Performance vs Expectations
Total company revenue of $1.0 billion for Q1 2026, which exceeded management's expectations despite a reported year-over-year decline of 10.7%. On an underlying basis (excluding discrete impacts from federal government and three large ETM customers), revenue declined 3.3% YoY, an improvement of 60 basis points versus the prior quarter.
Read all positive updates
Company Guidance
Kelly guided to measurable sequential improvement after a Q1 that produced $1.0B of revenue (down 10.7% YoY; underlying -3.3% excluding discrete federal and three ETM customer impacts, +60 bps vs prior quarter), $196.4M of gross profit (down 17% YoY) and an 18.9% gross profit rate (‑140 bps YoY; ~50 bps timing‑related; +10 bps vs Q4); reported SG&A was $199.3M (‑11.7% YoY) with adjusted SG&A down 10.3% and a projected net year‑over‑year core SG&A decline of ~ $25M for 2026. Adjusted EBITDA was $15.8M (1.5% margin, ‑150 bps YoY, in line with expectations; +20 bps vs Q4) and adjusted EPS was $0.03 (reported loss per share $0.17); Q1 charges totaled $9.2M (≈ $5.2M for integration/tech/org/restructuring). Balance sheet/cash metrics: used $25.4M of cash from operations in Q1, total available liquidity $252M ($26M cash, $226M undrawn), total borrowings $130.5M and debt/EBITDA near 1x; dividend maintained at $0.075/share. For Q2 the company expects revenue down 7–9% YoY (including at least 100 bps improvement in the underlying decline) and adjusted EBITDA margin of at least 2.5% (≥100 bps improvement vs Q1); for the remainder of 2026 they expect sequential YoY improvement each quarter, modest H2 revenue growth, roughly mid‑single‑digit revenue decline for the full year and measurable adjusted EBITDA margin expansion in H2 (back‑half margins expected above ~3%), while completing CRM migration by mid‑year, continuing technology modernization (enterprise platform phase beginning Q4 and majority of SET early 2027) and incurring additional implementation charges through 2026.Kelly Services Financial Statement Overview
Summary
Income Statement
24
Negative
Balance Sheet
62
Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.13B | 4.25B | 4.33B | 4.84B | 4.97B | 4.91B |
| Gross Profit | 803.00M | 853.00M | 882.60M | 961.40M | 1.01B | 919.20M |
| EBITDA | -25.50M | 101.70M | 39.90M | 99.20M | 103.40M | 82.40M |
| Net Income | -265.80M | -254.10M | -600.00K | 36.40M | -62.50M | 156.10M |
Balance Sheet | ||||||
| Total Assets | 2.25B | 2.25B | 2.63B | 2.58B | 2.66B | 2.89B |
| Cash, Cash Equivalents and Short-Term Investments | 25.60M | 33.00M | 39.00M | 125.80M | 153.70M | 112.70M |
| Total Debt | 183.90M | 159.10M | 302.60M | 51.30M | 70.40M | 78.90M |
| Total Liabilities | 1.29B | 1.27B | 1.40B | 1.33B | 1.41B | 1.56B |
| Stockholders Equity | 968.50M | 976.50M | 1.23B | 1.25B | 1.25B | 1.34B |
Cash Flow | ||||||
| Free Cash Flow | 66.20M | 114.10M | 15.80M | 61.40M | -88.30M | 73.80M |
| Operating Cash Flow | 73.30M | 122.60M | 26.90M | 76.70M | -76.30M | 85.00M |
| Investing Cash Flow | 17.90M | 22.30M | -361.60M | -14.10M | 167.50M | -180.70M |
| Financing Cash Flow | -97.40M | -161.10M | 214.80M | -59.60M | -50.60M | -8.10M |
Kelly Services Technical Analysis
Positive
9.51
Price Trends
9.20
Positive
9.19
Positive
10.76
Negative
Market Momentum
0.06
Negative
65.40
Neutral
91.08
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 9.51 is above the 20-day moving average (MA) of 8.88, above the 50-day MA of 9.20, and below the 200-day MA of 10.76, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 65.40 is Neutral, neither overbought nor oversold. The STOCH value of 91.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $774.98M | 15.89 | 27.22% | 5.12% | -3.91% | -22.90% | |
65 Neutral | $733.60M | -12.34 | 16.15% | 0.88% | 7.12% | -21.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $357.54M | -13.06 | -22.10% | 3.53% | -7.30% | -1239.34% | |
54 Neutral | $170.57M | -1.44 | -16.17% | ― | 7.14% | 61.21% | |
51 Neutral | $305.58M | -8.12 | 32.87% | ― | -3.33% | -45.12% | |
49 Neutral | $1.39B | 137.58 | -0.81% | 4.96% | 4.77% | -115.03% |
* Industrials Sector Average
KELYA
Kelly Services
9.87
-2.14
-17.79%
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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.
Disclaimer
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.