Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $304.52M
• Dividend Yield: 3.47%
• Average Volume (3M): 453.46K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.82
• 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: 32,043,064
• 10 Day Avg. Volume: 618,495
• 30 Day Avg. Volume: 453,462
• 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: 2.00
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 0.66
• Enterprise Value/Ebitda: 5.11
• 1Y Price Target: $16.50
• Price Target Upside: 90.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1.74
• Revenue Forecast (FY): $4.28B

• Rating: 46 Neutral
• Price Target: $8.50 ▼(-1.62% Downside)

Kelly Services faces significant challenges with declining revenues and profitability issues, as highlighted in the earnings call. Technical indicators suggest bearish momentum, and the negative P/E ratio raises concerns about financial health. Despite these challenges, the company is making efforts to stabilize and grow through strategic restructuring and technology integration.

Positive Factors

Revenue Growth

Strong revenue growth suggests a robust demand for services, potentially expanding market share and enhancing long-term business stability.

Cash Flow Improvement

Improved cash flow enhances financial flexibility, allowing for reinvestment in growth initiatives and reducing reliance on external financing.

Telecom Specialty Growth

Growth in the telecom specialty indicates successful market penetration and potential for continued expansion in a high-demand sector.

Negative Factors

Profitability Challenges

Negative profitability metrics highlight ongoing operational inefficiencies, which may hinder long-term financial health and shareholder returns.

Revenue Decline

A significant revenue decline indicates potential market challenges and could impact future growth and profitability if not addressed.

Goodwill Impairment

Goodwill impairment reflects reduced business performance expectations, potentially affecting investor confidence and future asset valuations.

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 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 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.50B	4.33B	4.84B	4.97B	4.91B	4.52B
Gross Profit	925.20M	882.60M	961.40M	1.01B	919.20M	827.60M
EBITDA	119.40M	39.90M	99.20M	103.40M	82.40M	59.10M
Net Income	-6.20M	-600.00K	36.40M	-62.50M	156.10M	-72.00M
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: Negative
• Last Price: 8.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 8.64 is below the 20-day moving average (MA) of 9.11, below the 50-day MA of 11.20, and below the 200-day MA of 12.18, indicating a bearish trend. The MACD of -0.86 indicates Negative momentum. The RSI at 31.77 is Neutral, neither overbought nor oversold. The STOCH value of 72.44 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
KFRC	66 Neutral	$587.36M	14.11	27.19%	6.13%	-5.91%	-23.01%
BBSI	65 Neutral	$895.58M	16.78	24.08%	0.91%	9.64%	9.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TBI	48 Neutral	$164.37M	-5.79	-8.91%	―	-5.37%	75.32%
ZIP	48 Neutral	$406.41M	―	―	―	-10.14%	-1381.34%
KELYA	46 Neutral	$304.52M	―	-13.11%	3.47%	0.46%	-477.90%
MAN	46 Neutral	$1.32B	―	-1.00%	8.18%	-2.44%	-156.01%

Kelly Services Corporate Events

Kelly Services’ Earnings Call: Mixed Results Amid Challenges

Kelly Services’ recent earnings call painted a mixed picture, with strong operational achievements in certain segments like Education and Telecom, and improved cash flow. However, these positives were overshadowed by significant revenue declines, a large goodwill impairment charge, and impacts from reduced demand from key customers and the federal government. The company is focusing on strategic restructuring and technology modernization to address these challenges.

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.