Mastech Holdings (MHH) AI Stock Analysis

• Market Cap: $101.23M
• Dividend Yield: N/A
• Average Volume (3M): 21.07K
• Price to Earnings (P/E): 26.8
• Beta (1Y): 1.19
• Revenue Growth: -1.07%
• EPS Growth: N/A
• Country: US
• Employees: 1,525
• Sector: Industrials
• Sector Strength: 61
• Industry: Staffing & Employment Services
• EPS (TTM): 0.28
• Shares Outstanding: 11,743,292
• 10 Day Avg. Volume: 17,845
• 30 Day Avg. Volume: 21,071
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.61
• Price to Cash Flow (P/CF): 7.50
• P/FCF Ratio: 7.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.00
• Price Target Upside: 97.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

Mastech Holdings presents a mixed outlook. Strengths include a strong balance sheet and improving profitability, but challenges with revenue growth and market uncertainties weigh on the stock. Technical indicators show bearish momentum, and the high valuation may limit upside. The positive leadership transition and strategic focus on AI are promising but need to be monitored for impact.

Mastech Holdings Business Overview & Revenue Model

Company Description

Mastech Digital, Inc., together with its subsidiaries, provides digital transformation IT services to large, medium-sized, and small companies in the United States. It operates through two segments, Data and Analytics Services, and IT Staffing Services. The company offers data management and analytics services, including project-based consulting services in the areas of master data management, enterprise data integration, big data and analytics, and digital transformation by using onsite and offshore resources. It also provides a range of IT staffing services in the areas of data management and analytics, cloud, mobility, social, automation, business intelligence/data warehousing, web services, enterprise resource planning and customer resource management, and e-business solutions. In addition, the company offers digital transformation services, such as digital learning services; and cloud-based enterprise application across sales, marketing, and customer service organizations. It provides its services across various industry verticals, including financial services, government, healthcare, manufacturing, retail, technology, telecommunications, and transportation. The company was formerly known as Mastech Holdings, Inc. and changed its name to Mastech Digital, Inc. in September 2016. Mastech Digital, Inc. was founded in 1986 and is headquartered in Pittsburgh, Pennsylvania.

How the Company Makes Money

Mastech Digital primarily generates revenue through its IT staffing services, where it connects skilled IT professionals with companies seeking talent in areas such as data analytics, cloud computing, and digital learning. The company earns money by charging fees for its staffing services, which can be structured as hourly billing rates or fixed project fees. Additionally, Mastech has expanded its service offerings to include digital transformation solutions, providing consulting and implementation services to help organizations enhance their digital capabilities. This diversification into digital services allows Mastech to capture additional revenue streams from consulting projects and long-term service contracts. The company's strategic partnerships with technology providers also play a crucial role in enhancing its service offerings and expanding its market reach.

Mastech Holdings Financial Statement Overview

Summary

Mastech Holdings shows a robust balance sheet with low leverage and strong equity. While profitability has improved with positive margins, the company faces challenges in revenue growth and declining free cash flow. Strong financial stability provides a good foundation, but focus on revenue and cash flow improvements is needed.

Income Statement

Mastech Holdings has shown a decline in total revenue over the past year, with a revenue growth rate of -1.07% from 2023 to 2024. However, profitability metrics have improved, with a net profit margin increasing to 1.71% in 2024 from a negative margin in 2023, and a positive EBIT margin of 1.91% in 2024 compared to a negative EBIT margin in the previous year. Despite these improvements, the company still faces challenges in maintaining consistent growth.

Balance Sheet

The company's balance sheet remains robust with an equity ratio of 78.42%, suggesting strong financial stability. The debt-to-equity ratio improved to 0.04 in 2024 from 0.06 in 2023, indicating lower leverage. Return on equity stands at 3.89%, reflecting moderate profitability on shareholders' investments. Overall, the balance sheet is a strong point for the company, providing a solid foundation for future growth.

Cash Flow

The cash flow position of Mastech Holdings is relatively strong, with a free cash flow to net income ratio of 1.84, indicating effective cash conversion from profits. However, free cash flow has decreased by 60.05% from 2023 to 2024, which could be a concern if this trend continues. Operating cash flow to net income ratio is 2.11, showing healthy operational cash generation compared to net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
198.94M	201.10M	242.24M	222.01M	194.10M
	Gross Profit
55.60M	51.04M	63.18M	59.44M	51.54M
	EBIT
3.79M	-9.28M	8.00M	10.75M	9.81M
	EBITDA
3.79M	-5.18M	16.39M	18.85M	16.99M
	Net Income Common Stockholders
3.40M	-7.14M	8.71M	12.22M	9.86M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.74M	21.15M	7.06M	6.62M	7.68M
	Total Assets
111.48M	105.23M	108.88M	113.70M	102.05M
	Total Debt
3.75M	5.08M	4.90M	17.92M	20.68M
	Net Debt
-23.99M	-16.07M	-2.16M	11.30M	13.00M
	Total Liabilities
24.05M	23.78M	22.88M	39.27M	42.51M
	Stockholders Equity
87.43M	81.44M	86.00M	74.43M	59.53M
Cash Flow		Free Cash Flow
6.25M	15.64M	11.78M	3.32M	20.93M
	Operating Cash Flow
7.19M	15.98M	12.62M	5.22M	21.23M
	Investing Cash Flow
-941.00K	-216.00K	-818.00K	-2.08M	-9.63M
	Financing Cash Flow
654.00K	-1.58M	-10.41M	-4.09M	-6.71M

Mastech Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MHH, the sentiment is Negative. The current price of 7.58 is below the 20-day moving average (MA) of 9.52, below the 50-day MA of 11.00, and below the 200-day MA of 11.06, indicating a bearish trend. The MACD of -0.43 indicates Negative momentum. The RSI at 41.65 is Neutral, neither overbought nor oversold. The STOCH value of 42.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MHH.

Mastech Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	75 Outperform	$67.64B	22.12	33.16%	2.53%	3.08%	11.92%
CTSH	72 Outperform	$33.33B	14.95	16.21%	1.80%	1.98%	7.16%
EPAM	69 Neutral	$8.27B	18.28	12.80%	―	0.80%	10.05%
WIT	68 Neutral	$29.45B	26.61	16.59%	2.21%	-3.41%	67.87%
MHH	63 Neutral	$101.23M	26.76	4.03%	―	-1.07%	―
Sector *	62 Neutral	$7.16B	12.21	3.05%	3.43%	3.62%	-14.48%
DXC	47 Neutral	$2.82B	267.98	-2.46%	―	-5.65%	78.20%

Mastech Holdings Corporate Events

Mastech Holdings Appoints New CFO Amid Leadership Changes

On March 31, 2025, Mastech Digital, Inc. announced the resignation of John J. Cronin, Jr. as Chief Financial Officer, effective April 14, 2025, with his continued employment until May 30, 2025, to aid in the transition. Concurrently, Kannan Sugantharaman was appointed as the new Chief Financial Officer and Chief Operations Officer, effective the same date. His employment terms include a base salary, performance-based bonuses, and stock options, reflecting the company’s strategic focus on financial and operational efficiency. Additionally, Bonnie K. Smith, a Class II director, will not seek reelection at the 2025 Annual Meeting to focus on personal commitments.