Mastech Holdings (MHH) AI Stock Analysis

• Market Cap: $90.97M
• Dividend Yield: N/A
• Average Volume (3M): 9.54K
• Price to Earnings (P/E): 109.7
• Beta (1Y): 0.95
• Revenue Growth: 5.16%
• EPS Growth: N/A
• Country: US
• Employees: 1,525
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 0.15
• Shares Outstanding: 11,784,183
• 10 Day Avg. Volume: 10,374
• 30 Day Avg. Volume: 9,545
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.67
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 1.10
• Enterprise Value/Ebitda: 16.68
• 1Y Price Target: $7.50
• Price Target Upside: -1.32% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 53 Neutral
• Price Target: $7.50 ▼(-1.32% Downside)

Mastech Holdings' overall stock score is primarily impacted by its financial performance challenges, including declining revenue and profit margins. The high P/E ratio suggests overvaluation, while the earnings call highlights both strong gross margins and significant revenue declines. Technical indicators show a mixed picture with short-term stabilization but long-term bearish trends.

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 generates revenue primarily through its IT staffing services, which involve the placement of technology professionals in various roles and projects within client organizations. The company earns fees based on the hourly billing rates for the professionals it places, as well as through direct hire placements where it charges a percentage of the candidate's first-year salary. Additionally, Mastech's Digital Transformation Services provide another revenue stream by offering consulting and project-based solutions that help clients enhance their digital capabilities. Strategic partnerships with technology firms and a robust network of candidate relationships also contribute significantly to its earnings, allowing Mastech to meet client demands efficiently and effectively.

Mastech Holdings Financial Statement Overview

Summary

Mastech Holdings faces challenges in revenue and profit growth, with declining margins impacting overall profitability. The balance sheet remains stable with low leverage, but declining ROE is a concern. Cash flow performance shows improvement, though historical volatility suggests potential risks. Overall, the company needs to address revenue and margin pressures while maintaining its strong cash flow position.

Income Statement

Mastech Holdings has experienced declining revenue growth, with a negative trend over the past few years, particularly a sharp decline in the TTM period. Profit margins have also decreased significantly, with net profit margin dropping to a low level in the TTM period. While gross profit margin remains relatively stable, the decline in EBIT and EBITDA margins indicates challenges in operational efficiency.

Balance Sheet

The company maintains a low debt-to-equity ratio, indicating prudent leverage management. However, return on equity has decreased over time, reflecting reduced profitability. The equity ratio remains healthy, suggesting a stable financial position despite the declining ROE.

Cash Flow

Cash flow metrics show improvement, with significant growth in free cash flow in the TTM period. The operating cash flow to net income ratio indicates strong cash generation relative to earnings. However, the volatility in free cash flow growth over the years suggests potential instability in cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	200.00M	198.94M	201.10M	242.24M	222.01M	194.10M
Gross Profit	55.55M	55.60M	51.04M	63.18M	59.44M	51.54M
EBITDA	3.66M	7.29M	-5.18M	16.39M	21.54M	16.99M
Net Income	868.00K	3.40M	-7.14M	8.71M	12.22M	9.86M
Balance Sheet
Total Assets	110.39M	111.48M	105.23M	108.88M	113.70M	102.05M
Cash, Cash Equivalents and Short-Term Investments	27.93M	27.74M	21.15M	7.06M	6.62M	7.68M
Total Debt	3.14M	3.75M	5.08M	4.90M	18.29M	20.68M
Total Liabilities	22.58M	24.05M	23.78M	22.88M	39.27M	42.51M
Stockholders Equity	87.81M	87.43M	81.44M	86.00M	74.43M	59.53M
Cash Flow
Free Cash Flow	7.28M	6.25M	15.64M	11.78M	3.32M	20.93M
Operating Cash Flow	7.64M	7.19M	15.98M	12.62M	5.22M	21.23M
Investing Cash Flow	-378.00K	-941.00K	-216.00K	-818.00K	-2.08M	-9.63M
Financing Cash Flow	340.00K	654.00K	-1.58M	-10.41M	-4.09M	-6.71M

Mastech Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MHH, the sentiment is Positive. The current price of 7.6 is below the 20-day moving average (MA) of 7.76, below the 50-day MA of 7.64, and below the 200-day MA of 9.52, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 52.82 is Neutral, neither overbought nor oversold. The STOCH value of 60.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MHH.

Mastech Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HQI	62 Neutral	138.04M	56.75	3.69%	2.42%	-9.76%	-53.41%
DHX	57 Neutral	138.27M	-13.82	-9.14%	―	-8.31%	-445.30%
MHH	53 Neutral	$90.97M	109.67	1.01%	―	5.16%	―
STRR	49 Neutral	40.63M	-8.85	-5.36%	―	-3.58%	-89.07%
TBI	49 Neutral	190.47M	-5.48	-11.09%	―	-13.01%	68.18%
BGSF	49 Neutral	80.34M	-11.93	―	―	-24.36%	-393.95%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%