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Kforce (KFRC)
:KFRC
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Kforce
(NYSE:KFRC)
60Neutral
Kforce (KFRC) vs. S&P 500 (SPY)
Market Cap
$846.43M
Dividend Yield3.45%
Average Volume (3M)150.31K
Price to Earnings (P/E)16.5
Beta (1Y)0.77
Revenue Growth-8.26%
EPS Growth-14.80%
CountryUS
Employees1,700
SectorIndustrials
Sector Strength66
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)2.66
Shares Outstanding19,111,073
10 Day Avg. Volume164,513
30 Day Avg. Volume150,307
Financial Highlights & Ratios
PEG Ratio2.32
Price to Book (P/B)N/A
Price to Sales (P/S)0.66
Price to Cash Flow (P/CF)10.60
P/FCF Ratio11.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$60.50Price Target Upside36.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Kforce Business Overview & Revenue Model
Company DescriptionKforce Inc. provides professional staffing services and solutions in the United States. It operates through two segments, Technology, and Finance and Accounting (FA). The Technology segment provides talent solutions to its clients primarily in the areas of information technology, such as systems/applications architecture and development, data management and analytics, business and artificial intelligence, machine learning, project and program management, and network architecture and security. This segment serves clients in various industries comprising financial and business services, communications, insurance, retail, and technology industries. The FA businesses segment offers talent solutions to its clients in areas, including financial planning and analysis, business intelligence analysis, accounting, transactional accounting, business and cost analysis, and taxation and treasury. It also provides consultants in lower skilled areas comprising loan servicing and support, customer and call center support, data entry, and other administrative roles. This segment serves clients in various industries, including financial and business services, healthcare, and manufacturing sectors. Kforce Inc. was founded in 1962 and is headquartered in Tampa, Florida.
How the Company Makes MoneyKforce generates revenue primarily through its staffing services by placing skilled professionals in temporary, permanent, and project-based roles within client organizations. The company earns fees from clients for every successful placement, typically billed as a percentage of the placed individual's salary for permanent positions or as hourly rates for temporary assignments. Kforce's key revenue streams include its Technology and Finance & Accounting segments, with a significant portion of its earnings derived from long-term partnerships with businesses across various industries seeking specialized talent. Additionally, Kforce leverages its extensive talent network and industry expertise to maintain competitive service offerings, contributing to its financial performance.
Kforce Financial Statement Overview
Summary
Kforce presents a stable financial profile with consistent profitability and effective equity utilization. Despite recent revenue declines, the company maintains strong margins and cash flow management. However, rising debt levels and decreasing equity indicate potential future risks. The company should focus on reversing revenue declines and managing debt to strengthen its financial position further.Income Statement
Kforce has demonstrated stable gross and net profit margins, with a slight decline in total revenue over the past year. The gross profit margin for the most recent year is approximately 27.42%, and the net profit margin is about 3.59%. EBIT and EBITDA margins also indicate consistent operational efficiency, although revenue growth has been negative recently, suggesting challenges in expanding top-line growth.70
Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of around 43.22%. However, the debt-to-equity ratio has increased, which could pose a risk if the trend continues. Return on Equity (ROE) stands at approximately 32.60% for the most recent year, highlighting effective utilization of equity, despite the overall decrease in stockholders' equity.65
Positive
Cash Flow
Kforce shows strong cash flow management with a positive operating cash flow to net income ratio of 1.72. Free cash flow generation remains robust, though free cash flow growth has been negative due to decreased operating cash flow. The company appears capable of generating sufficient cash to cover its expenditures and obligations.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.41B | 1.53B | 1.71B | 1.58B | 1.40B | Gross Profit |
| 385.44M | 427.07M | 501.11M | 456.86M | 396.22M | EBIT |
| 69.72M | 87.12M | 116.86M | 106.64M | 80.26M | EBITDA |
| 75.64M | 92.13M | 119.52M | 109.47M | 91.01M | Net Income Common Stockholders |
| 50.41M | 61.08M | 75.43M | 75.18M | 56.04M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 349.00K | 119.00K | 121.00K | 96.99M | 103.49M | Total Assets |
| 357.83M | 357.98M | 392.00M | 503.40M | 479.05M | Total Debt |
| 3.04M | 57.46M | 46.56M | 106.34M | 105.52M | Net Debt |
| 2.69M | 57.34M | 46.44M | 9.35M | 2.03M | Total Liabilities |
| 203.22M | 198.90M | 209.81M | 315.00M | 299.11M | Stockholders Equity |
| 154.62M | 159.08M | 182.20M | 188.41M | 179.94M |
| Cash Flow | Free Cash Flow | |||
| 79.30M | 83.70M | 82.70M | 66.46M | 102.68M | Operating Cash Flow |
| 86.87M | 91.47M | 90.81M | 72.90M | 109.16M | Investing Cash Flow |
| -7.56M | -4.86M | -14.28M | 8.30M | -6.93M | Financing Cash Flow |
| -79.08M | -86.61M | -173.39M | -87.70M | -18.58M |
Kforce Technical Analysis
Negative
44.29
Price Trends
48.75
Negative
52.80
Negative
56.69
Negative
Market Momentum
-1.40
Positive
35.76
Neutral
39.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KFRC, the sentiment is Negative. The current price of 44.29 is below the 20-day moving average (MA) of 47.08, below the 50-day MA of 48.75, and below the 200-day MA of 56.69, indicating a bearish trend. The MACD of -1.40 indicates Positive momentum. The RSI at 35.76 is Neutral, neither overbought nor oversold. The STOCH value of 39.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KFRC.
Kforce Risk Analysis
Kforce disclosed 26 risk factors in its most recent earnings report. Kforce 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
Kforce Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.05B | 20.53 | 25.20% | 0.77% | 7.03% | 7.75% | |
68 Neutral | $782.93M | 92.16 | 1.91% | 1.58% | 7.15% | -83.77% | |
63 Neutral | $90.27M | 27.11 | 4.03% | ― | -1.07% | ― | |
62 Neutral | $4.17B | 11.26 | 5.46% | 215.76% | 4.12% | -8.54% | |
60 Neutral | $846.43M | 16.53 | 32.14% | 3.45% | -8.26% | -14.80% | |
58 Neutral | $2.39B | 17.01 | 5.19% | 7.69% | -5.52% | 133.51% | |
52 Neutral | $388.81M | 11.43 | -0.05% | 2.68% | -10.42% | -101.51% |
* Industrials Sector Average
Performance Comparison
KFRC
Kforce
44.29
-18.08
-28.99%
BBSI
Barrett Business Services
40.74
10.30
33.84%
HSII
Heidrick & Struggles
37.96
7.74
25.61%
KELYA
Kelly Services
11.18
-11.98
-51.73%
MAN
ManpowerGroup
40.07
-32.25
-44.59%
MHH
Mastech Holdings
7.68
-1.12
-12.73%
Kforce Earnings Call Summary
Earnings Call Date: Feb 3, 2025 | % Change Since: -16.95% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with stable technology services demand and strategic progress, but faced challenges such as revenue and earnings declines, higher healthcare costs, and an uncertain policy environment. While strategic initiatives and financial health are positive, performance metrics indicate some caution.Highlights
Stable Demand for Technology Services
Despite an uncertain macro environment, demand for Kforce's technology services stabilized early in 2024 and remained stable, leading to industry-leading performance in the Technology business.
Strategic Initiatives and Investments
Kforce made significant progress in implementing Workday, opened the India Development Center, and integrated the firm's capabilities, which are expected to contribute to future financial objectives.
Increase in Shareholder Returns
Kforce's Board of Directors approved an increase in their dividend for the sixth consecutive year, highlighting strong cash flow and financial health.
Revenues Exceeded Expectations
Quarterly revenues of $343.8 million exceeded the midpoint of expectations, with technology business growing 0.6% sequentially.
Strong Balance Sheet and Cash Flow
Kforce has a strong balance sheet with minimal debt and generated $87 million in operating cash flows in 2024, returning 75% of it to shareholders.
Lowlights
Year-Over-Year Revenue Decline
Overall revenues in 2024 were $1.41 billion, representing a 9% decrease compared to the previous year.
Earnings Per Share Decline
Earnings per share declined 14% year-over-year on a GAAP basis and 23% on a non-GAAP basis.
Higher Healthcare Costs Impact
Higher-than-expected healthcare costs negatively impacted flex margins and SG&A, contributing to a decrease in gross margins.
Decline in Traditional Technology Staffing
Traditional staff augmentation offerings have been the driver of overall technology revenue declines year-over-year.
Uncertain Policy Environment
The potential impact of political changes and Fed rate adjustments adds uncertainty to the operating environment.
Company Guidance
In the Kforce Q4 2024 Conference Earnings Call, the company provided guidance indicating stability in its business environment, despite operating under uncertain macroeconomic conditions. Kforce's technology business saw a sequential growth of 0.6% per billing day, while overall revenues for the fourth quarter exceeded expectations at $343.8 million, representing a 0.4% sequential growth. In terms of profitability, earnings per share were at the midpoint of guidance, and the company maintained a focus on achieving operating margins of at least 10% at $2.1 billion in annual revenue. Discussions with clients suggest a potentially improved operating environment moving into 2025, although a significant positive inflection point in key performance indicators has not yet been observed. Kforce's strategic initiatives, including the establishment of an India Development Center and the implementation of Workday, are expected to contribute significantly to future revenue targets of $1.7 billion, with anticipated enhanced operating leverage of 100 basis points at that revenue level.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.