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Kforce Inc (KFRC)
NYSE:KFRC
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Kforce (KFRC) AI Stock Analysis

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KFRC

Kforce

(NYSE:KFRC)

Rating:62Neutral
Price Target:
$33.00
▲(2.71% Upside)
Kforce's overall stock score is driven by its stable financial position and attractive valuation, offset by bearish technical indicators and mixed earnings call sentiment. The company faces challenges in revenue growth and cash flow, but opportunities in AI and consulting provide potential for future growth.
Positive Factors
Consulting Solutions
Consulting solutions continue to outperform, growing sequentially and year-over-year.
Earnings Growth
There is confidence in medium- to long-term earnings growth opportunities for Kforce.
Shareholder Policies
Kforce has a clean balance sheet and shareholder-friendly capital return policies.
Negative Factors
Gross Margins
Gross margins came in 30 basis points below the guidance range, as employee healthcare costs remained a headwind.
IT Investment Hesitance
Economic uncertainty has reduced clients’ propensity to accelerate IT staffing and solutions investments in the near term.
Macro Uncertainty
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. 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, which include contract staffing and direct hire placements. The company earns fees from clients for placing temporary and permanent employees in various roles, charging a markup on the hourly rate paid to contract employees and a one-time fee for direct hire placements. Additionally, Kforce benefits from long-term partnerships with clients across multiple sectors, which provides a steady stream of repeat business. The company also focuses on high-demand areas such as digital transformation and compliance, enhancing its revenue potential. Seasonal fluctuations and economic conditions can impact Kforce's earnings, but its diversified client base and range of staffing solutions help mitigate risks.

Kforce Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook with positive developments in AI opportunities, consulting-led solutions, and FA business growth, but also challenges such as revenue declines, Direct Hire segment issues, unexpected project ends, and rising healthcare costs.
Q2-2025 Updates
Positive Updates
Sequential Flex Revenue Growth
Kforce delivered sequential Flex revenue growth in both Technology and Finance and Accounting businesses in Q2 2025, consistent with expectations.
Successful Consulting-Oriented Solutions
Increased demand for consulting-led offerings, demonstrating strong sequential and year-over-year growth in pipeline and contributing positively to gross margins.
AI-Related Opportunities
Kforce is seeing meaningful opportunities in the AI space, assisting market-leading companies with genAI projects, which suggests potential for future growth.
Strong Financial Position
The company maintained a solid balance sheet, conservative leverage, and returned $17.4 million to shareholders through dividends and share repurchases.
Finance and Accounting (FA) Business Growth
The FA business experienced sequential growth for the first time in several years, with an upward trend expected to continue in Q3 2025.
Negative Updates
Year-over-Year Revenue Decline
Total revenues of $334.3 million declined 6.2% year-over-year, mainly due to challenges in the Direct Hire segment.
Direct Hire Revenue Challenges
Direct Hire revenues were more challenged in Q2, coming in below expectations due to macroeconomic conditions, representing only 2% of overall revenues.
Unexpected Project Ends
A small number of unexpected project ends in Q2 led to a modest sequential decline expected in the Technology business for Q3.
Higher Healthcare Costs
Increased healthcare costs impacted gross margins, contributing to a 70 basis point decline year-over-year.
Company Guidance
During the Kforce Q2 2025 earnings call, the company provided guidance and insights into future expectations, highlighting several key metrics. Total revenues for the second quarter were $334.3 million, reflecting a 6.2% year-over-year decline. Flex revenues in the Technology and Finance and Accounting (FA) sectors showed slight sequential improvements. However, Direct Hire revenues were challenged and fell below expectations. The overall gross margin increased by 40 basis points sequentially to 27.1%, attributed to an 80 basis point rise in Flex margins, although this was partially offset by a lower-than-expected mix of Direct Hire revenues. SG&A expenses were 22.2% of total revenue. The company expects third-quarter revenues to range between $324 million and $332 million, with earnings per share projected between $0.53 and $0.61. Kforce continues to emphasize its strategic focus on consulting-oriented solutions, which have contributed to stability in its Technology business and a consistent average bill rate of $90 in this sector. The firm remains well-positioned to leverage opportunities in AI and other innovative technologies, anticipating an increase in demand for AI foundational readiness work.

Kforce Financial Statement Overview

Summary
Kforce demonstrates a stable financial position with strong operational efficiency and a solid balance sheet. However, declining revenue growth and free cash flow trends pose challenges that need to be addressed to sustain long-term growth and profitability.
Income Statement
65
Positive
Kforce's income statement shows a decline in revenue growth with a negative trend in recent periods, indicating potential challenges in maintaining sales momentum. Gross profit margin has slightly decreased over time, but remains relatively stable. The net profit margin has also seen a slight decline, reflecting pressure on profitability. Despite these challenges, the company maintains positive EBIT and EBITDA margins, showcasing operational efficiency.
Balance Sheet
70
Positive
The balance sheet reflects a strong equity position with a low debt-to-equity ratio, indicating financial stability and low leverage risk. Return on equity remains robust, although it has slightly decreased, suggesting effective use of shareholder funds. The equity ratio is healthy, highlighting a solid capital structure.
Cash Flow
60
Neutral
Cash flow analysis reveals a decline in free cash flow growth, which could impact future investments and financial flexibility. The operating cash flow to net income ratio is moderate, indicating reasonable cash generation relative to net income. The free cash flow to net income ratio remains strong, suggesting efficient cash conversion from profits.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.36B1.41B1.53B1.71B1.58B1.40B
Gross Profit370.13M385.44M427.07M501.11M456.86M396.22M
EBITDA66.70M75.64M92.13M126.97M109.47M91.01M
Net Income43.86M50.41M61.08M75.43M75.18M56.04M
Balance Sheet
Total Assets373.64M357.83M357.98M392.00M503.40M479.05M
Cash, Cash Equivalents and Short-Term Investments2.47M349.00K119.00K121.00K96.99M103.49M
Total Debt3.01M47.60M57.46M46.56M118.26M105.52M
Total Liabilities239.22M203.22M198.90M209.81M315.00M299.11M
Stockholders Equity134.42M154.62M159.08M182.20M188.41M179.94M
Cash Flow
Free Cash Flow60.50M79.30M83.70M82.70M66.46M102.68M
Operating Cash Flow71.38M86.87M91.47M90.81M72.90M109.16M
Investing Cash Flow-11.40M-7.56M-4.86M-14.28M8.30M-6.93M
Financing Cash Flow-57.62M-79.08M-86.61M-173.39M-87.70M-18.58M

Kforce Technical Analysis

Technical Analysis Sentiment
Negative
Last Price32.13
Price Trends
50DMA
37.51
Negative
100DMA
39.17
Negative
200DMA
45.98
Negative
Market Momentum
MACD
-1.41
Negative
RSI
41.86
Neutral
STOCH
33.31
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 32.13 is below the 20-day moving average (MA) of 32.17, below the 50-day MA of 37.51, and below the 200-day MA of 45.98, indicating a bearish trend. The MACD of -1.41 indicates Negative momentum. The RSI at 41.86 is Neutral, neither overbought nor oversold. The STOCH value of 33.31 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
75
Outperform
$1.26B24.1925.36%0.66%9.48%11.62%
74
Outperform
$1.05B31.777.18%1.19%8.89%-13.57%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
62
Neutral
$592.75M13.4729.14%4.83%-5.77%-11.93%
54
Neutral
$1.91B18.36-0.78%5.48%-3.79%-138.56%
54
Neutral
$93.21M115.251.01%5.16%
51
Neutral
$491.30M11.43-0.49%2.16%0.97%-112.75%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KFRC
Kforce
32.13
-29.05
-47.48%
BBSI
Barrett Business Services
48.14
13.36
38.41%
HSII
Heidrick & Struggles
50.37
14.78
41.53%
KELYA
Kelly Services
13.87
-5.87
-29.74%
MAN
ManpowerGroup
41.26
-25.89
-38.56%
MHH
Mastech Holdings
7.99
-1.31
-14.09%

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.

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: Aug 22, 2025