Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $339.12M
• Dividend Yield: 3.53%
• Average Volume (3M): 545.18K
• 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): 0.16
• Shares Outstanding: 30,915,586
• 10 Day Avg. Volume: 460,854
• 30 Day Avg. Volume: 545,179
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.07
• P/FCF Ratio: 2.67
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 0.11
• Enterprise Value/Gross Profit: 0.52
• Enterprise Value/Ebitda: -61.19
• 1Y Price Target: $16.00
• Price Target Upside: 70.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1
• Revenue Forecast (FY): $4.13B

• Rating: 56 Neutral
• Price Target: $10.00 ▲(6.72% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 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 generated robust operating and free cash flow in 2025 despite a reported loss, demonstrating the business can convert revenue into liquidity. Durable cash generation supports working capital needs, funds technology and cost initiatives, services debt, and preserves runway for execution over the next 2–6 months.

Manageable Leverage & Liquidity

Low leverage and materially reduced borrowings improve financial flexibility and reduce refinancing risk. Combined with nearly $288M available liquidity, the balance sheet can absorb continued revenue pressure, support strategic investments and buybacks, and underpins a multi-month restructuring or reinvestment plan.

Technology Modernization & AI

A unified platform and enterprise AI rollouts are structural enablers that can lower SG&A, speed placements, and improve client outcomes. These technology investments, if executed, create repeatable cost efficiencies and differentiation across staffing and enterprise offerings over the medium term.

Negative Factors

Multi-year Revenue Drift

Sustained revenue decline erodes scale in a staffing model where fixed-cost absorption and fill rates matter. Continued top-line contraction pressures gross profit dollars, limits margin recovery, and constrains the payoff from technology investments unless the company can reaccelerate client demand or win back lost accounts.

Profitability Volatility & Large Loss

A swing to a sizable reported loss highlights earnings volatility and reduces retained equity, increasing the risk of impairments and valuation allowances. Persistent margin weakness undermines free cash flow upside potential and could force deeper structural cost actions if revenue recovery lags, affecting long-term returns.

Customer Concentration & Discrete Headwinds

Material exposure to a few large customers and federal demand creates concentrated revenue risk and revenue volatility. Continued reductions or run-offs from those clients make near-term recovery uncertain and mean improvements depend on external customer behaviors rather than purely internal fixes.

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; and International. The Professional & Industrial segment delivers staffing, outcome-based, and direct-hire services in the areas of office, professional, light industrial, and contact center specialties. The Science, Engineering & Technology segment offers staffing, outcome-based, and direct-hire services in the areas of science and clinical research, engineering, information technology, and telecommunications specialties. The Education segment provides staffing and executive search services to early childhood, and higher education markets. The Outsourcing & Consulting segment offers recruitment process outsourcing (RPO), payroll process outsourcing, and talent advisory services, as well as managed services. The International segment provides staffing, RPO, and direct-hire services in Europe and Mexico. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, the United Kingdom, Italy, Germany, Ireland, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.

How the Company Makes Money

Kelly Services generates revenue primarily through its staffing solutions, which include temporary staffing, direct hire, and professional services. The company charges clients a markup on the wages of temporary workers and fees for permanent placements, which constitutes a significant portion of its revenue. Additionally, Kelly Services earns revenue from its outsourcing services, where it manages entire workforce functions for clients. The company has established partnerships with various organizations to expand its service offerings and improve its market position, which also contributes to its earnings.

Kelly Services Financial Statement Overview

Summary

Fundamentals are mixed. The income statement is weak (multi-year revenue drift lower and a sharp 2025 net loss with ~-6% margin), but the balance sheet leverage is manageable (debt-to-equity ~0.16) and cash generation is a key offset (2025 operating cash flow ~$123M and free cash flow ~$114M despite the loss).

Income Statement

Revenue has been drifting lower for several years (down about 5% in 2025 after flat-to-down trends in prior years), which is a headwind for a staffing business. Profitability is volatile: the company moved from modest profitability in 2023 to near break-even in 2024 and then a sharp net loss in 2025, pushing net margin to roughly -6%. Gross margin has been relatively steady around ~20%, but operating results have deteriorated and earnings quality looks weak given the recent swing to significant losses.

Balance Sheet

Leverage appears manageable with debt-to-equity remaining low-to-moderate (roughly 0.16 in 2025, down from ~0.25 in 2024), suggesting the balance sheet is not heavily debt-funded. However, equity has declined meaningfully from 2024 to 2025, and returns to shareholders turned deeply negative in 2025, reflecting the large loss and indicating pressure on capital if performance does not stabilize.

Cash Flow

Cash generation improved materially in 2025: operating cash flow rose to ~$123M and free cash flow to ~$114M, with positive free-cash-flow growth. Cash flow has been more resilient than earnings overall (including strong cash generation in 2020 and a rebound in 2025), though it has been inconsistent (notably negative operating and free cash flow in 2022). The key positive is that free cash flow remained solid even during a loss-making year, reducing near-term liquidity stress.

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

• Technical Analysis Sentiment: Negative
• Last Price: 9.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 9.37 is below the 20-day moving average (MA) of 9.97, below the 50-day MA of 9.60, and below the 200-day MA of 11.21, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 43.88 is Neutral, neither overbought nor oversold. The STOCH value of 60.74 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
BBSI	66 Neutral	$702.66M	13.33	24.08%	0.88%	9.64%	9.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KELYA	56 Neutral	$339.12M	―	-23.06%	3.53%	0.46%	-477.90%
KFRC	54 Neutral	$483.27M	13.79	27.19%	5.12%	-5.91%	-23.01%
MAN	51 Neutral	$1.25B	―	-0.64%	4.96%	-2.44%	-156.01%
ZIP	47 Neutral	$153.63M	-5.06	―	―	-10.14%	-1381.34%
TBI	44 Neutral	$124.76M	-2.58	-8.91%	―	-5.37%	75.32%

Kelly Services Corporate Events

Kelly Services shifts control to Hunt with new board

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 purchase of shares from the Terence E. Adderley Revocable Trust K. Following the board’s approval of an amendment to the rights plan on January 29–30, 2026, the trust closed a transaction in which Hunt acquired 3,039,940 shares of Kelly’s Class B common stock, making Hunt the controlling stockholder with 92.2% of that class; in parallel, Kelly granted Hunt extensive governance rights, including board representation, committee influence, information and access rights, and adopted covenants governing future going‑private and controlling stockholder transactions, potentially enabling Kelly to rely on Nasdaq’s “controlled company” exemption and reducing the proportion of independent directors. The deal triggered significant board changes on January 30, 2026, with five directors resigning and four Hunt designees—James Christopher Hunt, James K. Hunt, Edward Escudero, and Angela Brock-Kyle—joining the board alongside CEO Christopher Layden and three incumbent independent directors, and James Christopher Hunt assuming the role of chairman, marking a decisive shift in control and governance that aligns Kelly more closely with its new majority owner while raising governance considerations for minority shareholders.

The most recent analyst rating on (KELYA) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.

Kelly Services Adopts Stockholder Rights Plan Amid Control Shift

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 92.2% stake in Kelly’s voting Class B common stock to a private buyer. The plan, implemented via a dividend of one right per share of Class A and Class B common stock, is designed to give the board time to evaluate the proposed transaction and any prospective plans of the purchaser, and to protect the interests of all shareholders by diluting the economic power of any unapproved holder that amasses 75% or more of the Class B shares. The rights, which initially trade with the common stock and are not exercisable, would become exercisable upon an unapproved party crossing that 75% threshold or in certain change-of-control scenarios, allowing other holders to purchase Kelly stock or, in some cases, stock of an acquiring company at terms valued at twice the exercise price, while also permitting the board to redeem or exchange the rights under specified conditions. The plan, set to expire on January 10, 2027 unless terminated earlier, positions Kelly to retain leverage and flexibility in overseeing a potential transfer of control tied to its supervoting Class B stock, with implications for corporate governance and the balance of power between the incoming purchaser and existing shareholders.

The most recent analyst rating on (KELYA) stock is a Sell with a $8.50 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.