Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $315.74M
• Dividend Yield: 3.34%
• Average Volume (3M): 598.23K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.80
• 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: 673,351
• 30 Day Avg. Volume: 598,230
• 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: 1.93
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 0.66
• Enterprise Value/Ebitda: 5.11
• 1Y Price Target: $16.50
• Price Target Upside: 85.39% 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 ▼(-4.49% 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., 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

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: 8.90
• 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 8.9 is above the 20-day moving average (MA) of 8.63, below the 50-day MA of 10.16, and below the 200-day MA of 11.91, indicating a neutral trend. The MACD of -0.29 indicates Negative momentum. The RSI at 43.61 is Neutral, neither overbought nor oversold. The STOCH value of 76.98 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	$945.55M	17.71	24.08%	0.88%	9.64%	9.93%
KFRC	66 Neutral	$567.63M	13.98	27.19%	5.05%	-5.91%	-23.01%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ZIP	55 Neutral	$412.40M	-10.48	―	―	-10.14%	-1381.34%
MAN	48 Neutral	$1.36B	-62.48	-1.00%	4.87%	-2.44%	-156.01%
KELYA	46 Neutral	$315.74M	-2.00	-13.11%	3.34%	0.46%	-477.90%
TBI	46 Neutral	$144.61M	-5.09	-8.91%	―	-5.37%	75.32%

Kelly Services Corporate Events

Kelly Services VP Daniel Malan to Depart

On November 28, 2025, Daniel H. Malan, Senior Vice President and President of Science, Engineering & Technology, will depart from Kelly Services, Inc. The company is actively searching for a successor with expertise in enhancing go-to-market strategies and leveraging artificial intelligence for growth. In the meantime, CEO Chris Layden will oversee the segment to ensure continuity in service and strategic initiatives.