Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $417.72M
• Dividend Yield: 2.52%
• Average Volume (3M): 259.18K
• 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: 91
• Industry: Staffing & Employment Services
• EPS (TTM): 0.39
• Shares Outstanding: 31,907,118
• 10 Day Avg. Volume: 261,295
• 30 Day Avg. Volume: 259,184
• PEG Ratio: 7.09
• Price to Book (P/B): 0.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 26.46
• Enterprise Value/Market Cap: 1.63
• Enterprise Value/Revenue: 0.04
• Enterprise Value/Gross Profit: 0.79
• Enterprise Value/Ebitda: 2.13
• 1Y Price Target: $26.00
• Price Target Upside: 118.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• Price Target: $12.00 ▲(0.76%Upside)

The overall score reflects financial challenges with negative profitability and unattractive valuation. However, strategic initiatives and potential margin expansion provide some optimism. Mixed technical indicators and earnings call sentiment suggest cautious outlook.

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. (KELYA) is a global leader in workforce solutions, offering a comprehensive range of outsourcing and consulting services as well as staffing on a temporary, temporary-to-hire, and direct-hire basis. The company operates across multiple sectors, including education, engineering, science, IT, and office functions, providing specialized talent solutions to meet the evolving needs of businesses worldwide. With a strong focus on innovation and customer-centric approaches, Kelly Services is dedicated to connecting skilled professionals with leading organizations to enhance workforce efficiency and productivity.

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 significant financial challenges, as evidenced by declining revenue, profitability, and cash flow. The company has increased its leverage, which, combined with negative income, raises concerns about financial stability. While the balance sheet reflects a stable equity position, the negative trends in income and cash flow highlight the need for strategic financial improvements to enhance profitability and liquidity.

Income Statement

The income statement shows a declining trend in revenue and profitability over recent years. Gross profit margin is absent for the latest period, indicating potential issues in revenue generation or cost management. EBIT and EBITDA margins are negative, pointing to operational challenges. The net profit margin has also turned negative, reflecting operating losses. These factors collectively suggest declining financial performance and profitability.

Balance Sheet

The balance sheet indicates a moderately leveraged position with a debt-to-equity ratio that has increased due to rising debt. The equity ratio is stable, suggesting a balanced asset structure. However, return on equity has suffered due to negative net income. The stability in stockholders' equity provides some assurance, but the increased leverage and negative profitability pose risks.

Cash Flow

Cash flow analysis reveals a decrease in operating cash flow and free cash flow over time, indicating potential liquidity issues. The operating cash flow to net income ratio is positive, but the free cash flow to net income ratio is negative due to negative profits. Although financing activities have provided some cash inflow, the cash flow situation reflects potential liquidity and cash management challenges.

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

Kelly Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.91
• 50DMA: Positive
• 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 Positive. The current price of 11.91 is below the 20-day moving average (MA) of 11.97, above the 50-day MA of 11.84, and below the 200-day MA of 15.08, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 54.21 is Neutral, neither overbought nor oversold. The STOCH value of 65.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	12.29	5.40%	248.53%	4.14%	-12.41%
HSII	64 Neutral	$909.79M	129.31	1.71%	1.36%	6.17%	-85.16%
HQI	63 Neutral	$140.56M	41.22	5.67%	2.39%	-7.66%	-34.08%
MHH	61 Neutral	$76.59M	37.26	2.52%	―	3.93%	―
KELYA	54 Neutral	$417.72M	11.43	-1.60%	2.52%	-3.49%	-140.04%
TBI	54 Neutral	$193.82M	―	-36.98%	―	-16.76%	-1127.93%
ZIP	49 Neutral	$580.65M	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.

Kelly Services Announces Retirement of Chief Accounting Officer

On March 6, 2025, Kelly Services announced that Laura Lockhart, Vice President, Chief Accounting Officer, and Corporate Controller, plans to retire by December 31, 2025, or earlier if a successor is appointed. Her retirement is not due to any disputes with the company, and she is expected to assist with the transition after her successor is appointed.