Kforce (KFRC) AI Stock Analysis

Compare

98 Followers

KFRC Dividends

Top Page

Kforce

(NYSE:KFRC)

65Neutral

Kforce's overall score reflects stable financials with strong cash flow and a reasonable valuation. However, declining revenues and negative technical trends are significant concerns. Strategic investments and shareholder returns are positive, but economic uncertainties and declining demand present risks. The company needs to focus on growth and adapting to market changes to improve its outlook.

Kforce (KFRC) vs. S&P 500 (SPY)

Market Cap

$696.39M

Dividend Yield4.07%

Average Volume (3M)177.18K

Price to Earnings (P/E)14.9

Beta (1Y)0.66

Revenue Growth-6.38%

EPS Growth-12.32%

CountryUS

Employees1,700

SectorIndustrials

Sector Strength81

IndustryStaffing & Employment Services

Share Statistics

EPS (TTM)0.45

Shares Outstanding18,630,000

10 Day Avg. Volume247,126

30 Day Avg. Volume177,178

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.40

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit2.52

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$55.50

Price Target Upside48.48% 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 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 outlook with moderate profitability metrics and strong cash flow. However, declining revenues and moderate equity levels may pose risks. Continued focus on revenue growth and maintaining healthy cash flows will be crucial for future performance.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
47.60M	57.46M	46.56M	106.34M	105.52M
	Net Debt
47.25M	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

Technical Analysis Sentiment

Negative

Last Price37.38

Price Trends

50DMA

46.61

Negative

100DMA

50.57

Negative

200DMA

55.43

Negative

Market Momentum

MACD

-2.69

Positive

RSI

27.60

Positive

STOCH

22.72

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 37.38 is below the 20-day moving average (MA) of 42.55, below the 50-day MA of 46.61, and below the 200-day MA of 55.43, indicating a bearish trend. The MACD of -2.69 indicates Positive momentum. The RSI at 27.60 is Positive, neither overbought nor oversold. The STOCH value of 22.72 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BBSI	73 Outperform	$1.06B	21.13	25.20%	0.76%	7.03%	7.75%
KFRC	65 Neutral	$696.39M	14.89	31.45%	4.07%	-6.38%	-12.32%
HSII	64 Neutral	$838.44M	114.86	1.71%	1.48%	6.17%	-85.16%
Sector *	64 Neutral	$4.25B	11.72	5.24%	249.79%	4.07%	-9.45%
MHH	63 Neutral	$91.68M	27.53	4.03%	―	-1.07%	―
MAN	57 Neutral	$1.80B	17.68	5.19%	7.55%	-5.52%	133.51%
KELYA	53 Neutral	$400.26M	11.43	-0.05%	2.60%	-10.42%	-101.51%

* Industrials Sector Average

Performance Comparison

KFRC

Kforce

37.38

-25.04

-40.12%

BBSI

Barrett Business Services

40.77

10.05

32.71%

HSII

Heidrick & Struggles

40.68

9.36

29.89%

KELYA

Kelly Services

11.39

-11.71

-50.69%

MAN

ManpowerGroup

38.37

-35.16

-47.82%

MHH

Mastech Holdings

7.88

-0.62

-7.29%

Kforce Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: -12.58%|

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.

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.