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Kforce Inc (KFRC)
NYSE:KFRC

Kforce (KFRC) AI Stock Analysis

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KF

Kforce

(NYSE:KFRC)

Rating:67Neutral
Price Target:
$44.00
▲(0.57%Upside)
Kforce's stock score is driven by solid financial performance and reasonable valuation, despite challenges from declining revenue. Strategic investments and stable pricing provide optimism, but economic uncertainties weigh on the outlook.
Positive Factors
Consulting Solutions
Kforce benefits from structural long-term tailwinds supporting its tech flex business and an increasing mix of higher-value consulting solutions.
Growth Opportunities
There is confidence in medium- to long-term earnings growth opportunities for Kforce.
International Expansion
The company’s offshore development center in India also appears to be progressing well, with 'a couple of projects' won there already and capacity to scale to meet new demand.
Negative Factors
Cost Pressures
Gross margins came in 30 basis points below the guidance range, as employee healthcare costs remained a headwind.
Economic Uncertainty
Economic uncertainty has reduced clients’ propensity to accelerate IT staffing and solutions investments in the near term.
Visibility Challenges
There is elevated macro uncertainty and limited visibility into sustainably improving trends for Kforce.

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

Kforce Business Overview & Revenue Model

Company DescriptionKforce Inc. (KFRC) is a professional staffing and solutions firm operating within the sectors of technology and finance & accounting. The company specializes in providing clients with skilled professionals in these fields, helping organizations meet their workforce needs through flexible staffing solutions, direct hire services, and managed services. Kforce has a significant presence across the United States, with a focus on delivering quality and value to both clients and candidates.
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: 3.28%|
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
72
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
68
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
75
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.38B1.41B1.53B1.71B1.58B1.40B
Gross Profit378.45M385.44M427.07M501.11M456.86M396.22M
EBITDA71.68M75.64M92.13M119.52M109.47M91.01M
Net Income47.57M50.41M61.08M75.43M75.18M56.04M
Balance Sheet
Total Assets368.19M357.83M357.98M392.00M503.40M479.05M
Cash, Cash Equivalents and Short-Term Investments444.00K349.00K119.00K121.00K96.99M103.49M
Total Debt80.92M47.60M57.46M46.56M106.34M105.52M
Total Liabilities230.17M203.22M198.90M209.81M315.00M299.11M
Stockholders Equity138.03M154.62M159.08M182.20M188.41M179.94M
Cash Flow
Free Cash Flow64.11M79.30M83.70M82.70M66.46M102.68M
Operating Cash Flow73.95M86.87M91.47M90.81M72.90M109.16M
Investing Cash Flow-9.99M-7.56M-4.86M-14.28M8.30M-6.93M
Financing Cash Flow-63.62M-79.08M-86.61M-173.39M-87.70M-18.58M

Kforce Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price43.75
Price Trends
50DMA
40.60
Positive
100DMA
44.30
Negative
200DMA
50.45
Negative
Market Momentum
MACD
0.49
Negative
RSI
65.63
Neutral
STOCH
88.48
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KFRC, the sentiment is Neutral. The current price of 43.75 is above the 20-day moving average (MA) of 41.11, above the 50-day MA of 40.60, and below the 200-day MA of 50.45, indicating a neutral trend. The MACD of 0.49 indicates Negative momentum. The RSI at 65.63 is Neutral, neither overbought nor oversold. The STOCH value of 88.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$1.10B21.9125.86%0.75%8.41%7.93%
70
Neutral
$1.00B142.201.71%1.26%6.17%-85.16%
67
Neutral
$815.06M17.3231.45%3.58%-6.38%-12.32%
65
Neutral
$10.77B15.805.51%1.90%3.03%-26.66%
MHMHH
61
Neutral
$82.47M40.132.52%3.93%
MAMAN
57
Neutral
$2.05B19.205.19%3.27%-5.52%133.51%
55
Neutral
$435.24M11.43-1.60%2.44%-3.49%-140.04%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KFRC
Kforce
43.75
-16.19
-27.01%
BBSI
Barrett Business Services
43.17
10.83
33.49%
HSII
Heidrick & Struggles
48.52
17.62
57.02%
KELYA
Kelly Services
12.39
-8.73
-41.34%
MAN
ManpowerGroup
44.26
-23.41
-34.59%
MHH
Mastech Holdings
7.01
-0.41
-5.53%

Kforce Corporate Events

Stock Buyback
Kforce Announces Stock Repurchase Plan Starting July 2025
Neutral
Jun 17, 2025

On June 13, 2025, Kforce Inc. announced its entry into a corporate stock trading plan to repurchase its outstanding common stock, as authorized by its Board of Directors. The plan, compliant with Rule 10b5-1 of the Securities Exchange Act of 1934, allows for stock repurchases between July 1, 2025, and July 30, 2025, through an independent broker, subject to specific constraints.

The most recent analyst rating on (KFRC) stock is a Buy with a $71.00 price target. To see the full list of analyst forecasts on Kforce stock, see the KFRC Stock Forecast page.

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.Date of analysis: Jun 27, 2025