Mastech Holdings (MHH) AI Stock Analysis

• Market Cap: $64.57M
• Dividend Yield: N/A
• Average Volume (3M): 34.29K
• Price to Earnings (P/E): 21.0
• Beta (1Y): 0.95
• Revenue Growth: 1.24%
• EPS Growth: 97.14%
• Country: US
• Employees: 1,525
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 0.21
• Shares Outstanding: 11,697,331
• 10 Day Avg. Volume: 46,763
• 30 Day Avg. Volume: 34,294
• PEG Ratio: -1.64
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 0.43
• P/FCF Ratio: 7.62
• Enterprise Value/Market Cap: 0.53
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 0.65
• Enterprise Value/Ebitda: 11.56
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.89
• Revenue Forecast (FY): $195.02M

• Rating: 56 Neutral
• Price Target: $5.50 ▼(-30.20% Downside)
• Action: Reiterated Date: 03/19/26
• Date: Action: Reiterated 03/19/26

The score is primarily supported by a conservative balance sheet and consistently positive cash generation, but held back by weakening revenue/profitability and a bearish technical setup. The latest earnings call adds a modest offset via improving bookings and liquidity/repurchase actions, though near-term revenue headwinds and limited visibility remain.

Positive Factors

Conservative balance sheet

Very low leverage and a conservatively positioned balance sheet give Mastech durable financial flexibility. This reduces refinancing risk during cyclical staffing slowdowns, supports strategic investments or buybacks, and preserves capacity to fund operations through weak demand periods.

Consistent cash generation

Consistent positive operating and free cash flow implies underlying cash conversion and earnings quality. Reliable cash generation sustains reinvestment, funds restructuring and repurchases, and cushions margin swings from working-capital variability typical in staffing models.

Operational improvements & pricing

EDGE efficiency work, platform partnerships and a focus on AI-enabled services, combined with record bill rates, indicate structural moves toward higher-value engagements. These actions support sustained gross-margin discipline and a shift to pricier contract mix over the medium term.

Negative Factors

Revenue decline trend

Multi-year and recent quarter revenue declines signal weakening demand or lost engagements, eroding scale and operating leverage. Sustained top-line contraction reduces ability to cover fixed costs and compresses long-term profitability unless new client wins or segment recoveries materialize.

Client in‑sourcing & volume loss

A top‑customer insourcing trend is a structural client concentration risk that reduces utilization and billable headcount. Continued vendor displacement through H1 2026 undermines revenue visibility, lengthens recovery timelines, and highlights vulnerability to client-side strategic shifts.

Compressed GAAP profitability

GAAP profits have been squeezed by one-time restructuring and transition charges and operating compression, producing very thin net margins. Persistent low operating profit reduces ROE and limits reinvestment capacity unless cost savings or revenue recovery sustainably restore margin.

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 Holdings makes money primarily by supplying skilled professionals to client organizations and charging fees tied to those labor services. A major revenue stream is staffing/consulting services where Mastech recruits, places, and manages consultants (often in information technology and other professional roles) who work on client engagements; the company earns revenue based on billable hours or contracted rates billed to clients, while paying wages and related costs to the consultants, with the spread representing gross profit. Another revenue stream is permanent placement (if offered in a given period), where Mastech earns one-time placement fees when it sources a candidate who is hired directly by a client. Revenue is driven by client demand for skilled talent, the company’s ability to recruit and retain consultants, and utilization (the percentage of consultants actively billing). Specific significant partnerships or customer concentration details: null.

Mastech Holdings Financial Statement Overview

Summary

Financial risk looks contained due to very low leverage and strong liquidity, supported by consistently positive operating cash flow/free cash flow. However, the income statement is the key drag: revenue has been declining and profitability has compressed to very thin levels, keeping the score in the low-to-mid range despite balance-sheet strength.

Income Statement

Profitability has deteriorated meaningfully versus earlier years. Revenue has trended down from 2022 to 2025 (with a sharp decline in 2023 and additional declines in 2024–2025), and earnings have been volatile—loss-making in 2023, a partial rebound in 2024, then near break-even operating profit in 2025 with a very thin net margin. A modest positive is that gross margin has been relatively stable in the mid-to-high 20% range, but the sharp compression in operating profitability in 2025 is the key weakness.

Balance Sheet

The balance sheet appears conservatively positioned with low leverage: debt-to-equity is very low in 2024–2025 (around ~0.04), and equity remains substantial relative to assets. This provides flexibility and reduces financial risk. The main weakness is weaker recent shareholder returns, with return on equity dropping sharply in 2025 in line with the earnings slowdown.

Cash Flow

Cash generation is a relative strength. Operating cash flow and free cash flow are positive across all shown years, and free cash flow improved in 2025 versus 2024. Free cash flow has also generally tracked net income closely, suggesting earnings quality is reasonable. The key watch-out is inconsistency in how much accounting profit converts to operating cash flow (the coverage ratio is moderate and not steadily improving), which can signal working-capital swings typical in staffing businesses.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	191.37M	198.94M	201.10M	242.24M	222.01M
Gross Profit	53.06M	55.60M	51.04M	63.18M	59.44M
EBITDA	1.00K	9.39M	-5.18M	17.79M	18.85M
Net Income	609.00K	3.40M	-7.14M	8.71M	12.22M
Balance Sheet
Total Assets	111.84M	111.48M	105.23M	108.88M	114.07M
Cash, Cash Equivalents and Short-Term Investments	36.53M	27.74M	21.15M	7.06M	6.62M
Total Debt	3.56M	3.75M	5.08M	4.90M	18.29M
Total Liabilities	22.53M	24.05M	23.78M	22.88M	39.64M
Stockholders Equity	89.31M	87.43M	81.44M	86.00M	74.43M
Cash Flow
Free Cash Flow	10.76M	6.25M	15.64M	11.78M	3.32M
Operating Cash Flow	11.13M	7.19M	15.98M	12.62M	5.22M
Investing Cash Flow	-486.00K	-941.00K	-216.00K	-818.00K	-2.08M
Financing Cash Flow	-1.13M	654.00K	-1.58M	-10.41M	-4.09M

Mastech Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 7.88 is above the 20-day moving average (MA) of 6.23, above the 50-day MA of 6.69, and above the 200-day MA of 7.15, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 31.65 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, 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
HQI	68 Neutral	$141.71M	14.57	10.52%	2.55%	-12.65%	368.36%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DHX	59 Neutral	$115.57M	-5.14	-12.89%	―	-9.13%	-1032.39%
BGSF	59 Neutral	$70.67M	-6.66	-17.82%	41.67%	-36.79%	-507.05%
MHH	56 Neutral	$64.57M	21.01	0.69%	―	1.24%	97.14%
JOB	48 Neutral	$28.72M	-35.64	-51.65%	―	-15.43%	-43.45%
IPDN	44 Neutral	$6.69M	-0.83	-78.12%	―	-7.26%	-1.37%

Mastech Holdings Corporate Events

Mastech Holdings Enters Dallas Office Lease, Expanding Presence

On March 5, 2026, Mastech Digital, Inc. signed a lease for approximately 5,895 square feet of office space at 3300 Olympus Boulevard, Suite 560, in Dallas, Texas, with an initial five-year term beginning after a five-month abatement period starting August 24, 2026, or later as specified. Monthly base rent will start at $18,176.25 and step up over the 60-month term, with the company also responsible for its pro rata share of property and operating expenses, and the lease includes an option for a single five-year renewal.

The decision to secure new Dallas office space signals an investment in expanding or formalizing Mastech Digital’s presence in the Texas market, potentially supporting growth in regional operations and client service capabilities. For stakeholders, the structured rent escalations and defined cost-sharing on property expenses provide clarity on the company’s future occupancy costs while underscoring a longer-term commitment to this geographic hub.

The most recent analyst rating on (MHH) stock is a Hold with a $7.50 price target. To see the full list of analyst forecasts on Mastech Holdings stock, see the MHH Stock Forecast page.

Mastech Digital Posts Mixed 2025 Results, Adds Buyback Plan

On February 19, 2026, Mastech Digital reported its fourth-quarter and full-year 2025 results, showing revenue pressure but improved profitability metrics under an ongoing transformation plan. Fourth-quarter 2025 consolidated revenue fell 10.4% year over year to $45.5 million, with Data and Analytics Services and IT Staffing Services both declining, while gross margin ticked up sequentially and GAAP net income rose to $1 million from $0.3 million a year earlier.

For full-year 2025, revenue slipped 3.8% to $191.4 million as both operating segments softened, yet non-GAAP net income held steady at $8.6 million and non-GAAP EPS edged up to $0.72 despite higher severance and finance transition costs. Management highlighted continued progress on the EDGE efficiency initiative launched in 2025 and framed 2025 as a transition year laying the groundwork for execution in 2026, while the board underscored confidence in the company’s trajectory by authorizing a new $5 million share repurchase program following the buyback of roughly 300,000 shares for $2.2 million during 2025.

The new repurchase authorization, effective February 16, 2026, allows Mastech Digital to retire additional stock via negotiated and block transactions at the board’s discretion, adding a potential capital-return lever for shareholders. The combination of modestly lower top-line performance, stable or improved non-GAAP earnings, and ongoing restructuring and efficiency gains suggests the company is prioritizing margin resilience and strategic investments in areas such as data and AI despite a cautious client spending environment.

The most recent analyst rating on (MHH) stock is a Hold with a $7.50 price target. To see the full list of analyst forecasts on Mastech Holdings stock, see the MHH Stock Forecast page.