Education
About Us
Working with TipRanks
Follow Us
Kforce Inc (KFRC)
NYSE:KFRC
Top Page
Kforce
(NYSE:KFRC)
Rating:71Outperform
Price Target:
$46.00
▲(16.96%Upside)
Positive Factors
Business Development
Kforce benefits from structural long-term tailwinds supporting its tech flex business and an increasing mix of higher-value consulting solutions.
Earnings Growth
There is confidence in medium- to long-term earnings growth opportunities for Kforce.
Negative Factors
Economic Conditions
Economic uncertainty has reduced clients’ propensity to accelerate IT staffing and solutions investments in the near term.
Financial Performance
Gross margins came in 30 basis points below the guidance range, as employee healthcare costs remained a headwind.
Kforce (KFRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$768.86M
Dividend Yield3.78%
Average Volume (3M)127.66K
Price to Earnings (P/E)15.6
Beta (1Y)0.70
Revenue Growth-6.38%
EPS Growth-12.32%
CountryUS
Employees1,700
SectorIndustrials
Sector Strength87
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.45
Shares Outstanding18,630,000
10 Day Avg. Volume121,070
30 Day Avg. Volume127,657
Financial Highlights & Ratios
PEG Ratio4.84
Price to Book (P/B)6.03
Price to Sales (P/S)0.00
P/FCF Ratio13.30
Enterprise Value/Market Cap1.49
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit3.03
Enterprise Value/Ebitda3.73
Forecast
1Y Price Target
$55.50Price Target Upside41.11% Upside
Rating ConsensusHold
Number of Analyst Covering4
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 makes money primarily through its staffing services, which include providing temporary professionals and direct hire placements to businesses. The company earns revenue by charging clients for the services of their temporary employees, typically on an hourly basis, with a markup over the salary paid to the professionals. In the case of direct hire placements, Kforce receives a one-time fee, which is often a percentage of the hired employee's first-year salary. Key revenue streams for Kforce include its Technology segment, which focuses on IT staffing, and its Finance & Accounting segment. Significant partnerships with large corporations and government agencies contribute to its earnings by providing stable demand for its workforce solutions.
Kforce Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: -7.15%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call for Kforce Q1 2025 reflects a mixed sentiment. While the company has made significant strategic investments and maintained stable bill rates, it faces challenges such as declining revenues and economic uncertainties. Despite these challenges, Kforce's focus on consulting-oriented offerings and shareholder returns provides a positive outlook.Q1-2025 Updates
Positive Updates
Strategic Investments and Transformation
Kforce continues to invest in key strategic initiatives, such as the implementation of Workday, which is on schedule for early 2026, and the enhancement of their India development center. These initiatives are expected to significantly improve efficiency and contribute to long-term growth.
Consulting-Oriented Offerings Growth
Despite a general economic slowdown, Kforce's consulting-oriented offerings have seen significant demand, particularly in areas such as AI, cloud, and data modernization, highlighting the firm's strategic shift towards high-value services.
Strong Cash Flow and Capital Returns
Kforce has returned approximately $1 billion to shareholders since 2007, representing about 75% of the cash generated, through dividends and share repurchases, demonstrating a strong commitment to shareholder value.
Stable Bill Rates
The average bill rate in Kforce's technology business remained stable at $90, with consistent demand for highly skilled talent, indicating a robust pricing environment despite broader economic challenges.
Negative Updates
Decline in Total Revenues
Total revenues decreased by 4.7% year-over-year. Specifically, revenues in the technology business declined by 5.2% sequentially and 3.5% year-over-year on a billing day basis.
Economic Uncertainty Impacting Demand
Macroeconomic uncertainties, such as the announcement of significant tariffs, have increased and may delay the acceleration of investments in technology initiatives by clients.
Higher Health Care Costs
Gross margins declined by 40 basis points year-over-year, largely due to higher health care costs, which have impacted overall profitability.
Direct Hire Business Decline
The Direct Hire business, representing approximately 2% of overall revenues, slowed in early April and is expected to decline sequentially in Q2.
Company Guidance
During the Kforce Q1 2025 Earnings Conference Call, the company provided guidance highlighting several key metrics and strategic initiatives. Total revenues for the first quarter were reported at $330 million, reflecting a 4.7% decline year-over-year on a billing day basis. Despite this, there was a noted improvement in consultants and assignments over the last six weeks of the quarter, with front-end KPIs elevated compared to earlier levels. The company is cautiously optimistic, expecting Q2 revenues to range between $332 million and $340 million, with earnings per share projected between $0.57 and $0.65. Operating cash flows were $0.2 million, impacted by the timing of client payments and deferred tax payments. The implementation of Workday is anticipated to go live in early 2026, expected to yield immediate efficiency gains. Kforce is also advancing its nearshore and offshore capabilities through its development center in India. These strategic moves are set to significantly contribute to long-term financial goals, including achieving double-digit operating margins as revenues increase. The company continues to invest in AI readiness, emphasizing data, cloud, and modernization projects. Kforce remains committed to an organic growth strategy, underscored by aggressive share repurchase activities, returning approximately $28.3 million to shareholders in the first quarter alone.Kforce Financial Statement Overview
Summary
Kforce presents a stable financial outlook with moderate profitability, strong cash generation, and manageable debt levels. However, declining revenues and moderate equity levels may pose risks.Income Statement
Kforce shows a mixed income statement performance. The TTM (Trailing-Twelve-Months) gross profit margin stands at 27.35%, with a net profit margin of 3.44%, indicating moderate profitability. EBIT margin is 4.74%, while EBITDA margin is 5.18%, suggesting moderate operating efficiency. Revenue has declined over the past few years, with a negative growth rate in recent periods, highlighting a potential risk.72
Positive
Balance Sheet
Kforce's balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.59, indicating manageable debt levels. Return on equity is 34.45%, which suggests strong profitability relative to shareholder equity. However, the equity ratio of 37.49% indicates a moderate level of equity financing, which may pose a risk if liabilities increase.68
Positive
Cash Flow
Kforce's cash flow statement shows a healthy free cash flow to net income ratio of 1.35 and an operating cash flow to net income ratio of 1.55, indicating strong cash generation relative to earnings. However, free cash flow growth has been inconsistent, reflecting potential volatility in cash management.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.38B | 1.41B | 1.53B | 1.71B | 1.58B | 1.40B | Gross Profit |
| 378.45M | 385.44M | 427.07M | 501.11M | 456.86M | 396.22M | EBIT |
| 65.63M | 69.72M | 87.12M | 116.86M | 106.64M | 80.26M | EBITDA |
| 71.68M | 75.64M | 92.13M | 119.52M | 109.47M | 91.01M | Net Income Common Stockholders |
| 47.57M | 50.41M | 61.08M | 75.43M | 75.18M | 56.04M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 444.00K | 349.00K | 119.00K | 121.00K | 96.99M | 103.49M | Total Assets |
| 368.19M | 357.83M | 357.98M | 392.00M | 503.40M | 479.05M | Total Debt |
| 80.92M | 47.60M | 57.46M | 46.56M | 106.34M | 105.52M | Net Debt |
| 80.48M | 47.25M | 57.34M | 46.44M | 9.35M | 2.03M | Total Liabilities |
| 230.17M | 203.22M | 198.90M | 209.81M | 315.00M | 299.11M | Stockholders Equity |
| 138.03M | 154.62M | 159.08M | 182.20M | 188.41M | 179.94M |
| Cash Flow | Free Cash Flow | ||||
| 64.11M | 79.30M | 83.70M | 82.70M | 66.46M | 102.68M | Operating Cash Flow |
| 73.95M | 86.87M | 91.47M | 90.81M | 72.90M | 109.16M | Investing Cash Flow |
| -9.99M | -7.56M | -4.86M | -14.28M | 8.30M | -6.93M | Financing Cash Flow |
| -63.62M | -79.08M | -86.61M | -173.39M | -87.70M | -18.58M |
Kforce Technical Analysis
Negative
39.33
Price Trends
41.51
Negative
45.95
Negative
51.80
Negative
Market Momentum
-0.27
Negative
40.54
Neutral
24.55
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 39.33 is below the 20-day moving average (MA) of 40.75, below the 50-day MA of 41.51, and below the 200-day MA of 51.80, indicating a bearish trend. The MACD of -0.27 indicates Negative momentum. The RSI at 40.54 is Neutral, neither overbought nor oversold. The STOCH value of 24.55 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.08B | 21.15 | 25.86% | 0.76% | 8.41% | 7.93% | |
71 Outperform | $768.86M | 15.57 | 31.45% | 3.78% | -6.38% | -12.32% | |
66 Neutral | $4.51B | 12.22 | 5.40% | 3.63% | 4.14% | -12.01% | |
64 Neutral | $910.41M | 127.20 | 1.71% | 1.38% | 6.17% | -85.16% | |
61 Neutral | $75.18M | 37.89 | 2.52% | ― | 3.93% | ― | |
57 Neutral | $1.98B | 17.49 | 5.19% | 3.36% | -5.52% | 133.51% | |
51 Neutral | $419.95M | 11.43 | -1.60% | 2.50% | -3.49% | -140.04% |
* Industrials Sector Average
Performance Comparison
KFRC
Kforce
39.33
-19.55
-33.20%
BBSI
Barrett Business Services
41.29
7.81
23.33%
HSII
Heidrick & Struggles
43.40
10.34
31.28%
KELYA
Kelly Services
11.51
-9.29
-44.66%
MAN
ManpowerGroup
40.32
-28.47
-41.39%
MHH
Mastech Holdings
6.61
-0.99
-13.03%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.