Mastech Holdings (MHH) AI Stock Analysis

• Market Cap: $78.23M
• Dividend Yield: N/A
• Average Volume (3M): 19.25K
• Price to Earnings (P/E): 36.6
• Beta (1Y): 0.92
• Revenue Growth: 3.93%
• EPS Growth: N/A
• Country: US
• Employees: 1,525
• Sector: Industrials
• Sector Strength: 90
• Industry: Staffing & Employment Services
• EPS (TTM): 0.06
• Shares Outstanding: 11,764,649
• 10 Day Avg. Volume: 15,673
• 30 Day Avg. Volume: 19,253
• PEG Ratio: -0.49
• Price to Book (P/B): 1.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.83
• Enterprise Value/Market Cap: 1.60
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: 2.25
• Enterprise Value/Ebitda: 5.79
• 1Y Price Target: $15.00
• Price Target Upside: 134.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 61 Neutral
• Price Target: $8.00 ▲(25.20%Upside)

Mastech Holdings' financial stability and strategic partnerships are positive indicators. However, the company's profitability challenges, overvaluation concerns, and weak technical indicators contribute to a moderate overall score.

Mastech Holdings Business Overview & Revenue Model

Company Description

Mastech Digital, Inc. (MHH) is a leading provider of Digital Transformation IT Services. The company specializes in delivering high-quality IT staffing solutions and digital transformation services, including data management and analytics, digital learning, and digital workforce solutions. Mastech operates across various industry sectors, providing tailored services that help businesses navigate the evolving digital landscape.

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 exhibits a stable financial position with a strong balance sheet characterized by low leverage and high equity ratios. The company maintains positive cash flow metrics but faces challenges in revenue growth and profitability ratios.

Income Statement

Mastech Holdings has demonstrated stable gross profit margins with the TTM (Trailing-Twelve-Months) gross profit margin at approximately 27.8%. However, the net profit margin has seen fluctuations, currently at about 1.1% for the TTM, indicating challenges in converting revenue into net income. Revenue growth has been inconsistent, with recent periods showing a decline. EBIT and EBITDA margins are relatively low, indicating potential issues with operational efficiency.

Balance Sheet

The company's balance sheet shows strength with a low debt-to-equity ratio of approximately 0.04, indicating minimal financial leverage and risk. The equity ratio stands robust at around 79.0%, reflecting a solid capital structure. However, return on equity (ROE) has been subdued, currently at about 2.4% for the TTM, suggesting limited profitability on shareholder equity.

Cash Flow

Operating cash flow is positive, with the TTM operating cash flow to net income ratio at 2.6, indicating strong cash generation relative to net income. Free cash flow has grown, but at a slower pace, with a free cash flow to net income ratio of approximately 2.2. The company's ability to generate cash flows shows stability, although growth rates could improve.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
200.44M	198.94M	201.10M	242.24M	222.01M	194.10M
	Gross Profit
55.66M	55.60M	51.04M	63.18M	59.44M	51.54M
	EBIT
2.34M	3.79M	-9.28M	8.00M	10.75M	9.81M
	EBITDA
5.21M	7.29M	-5.18M	16.39M	18.85M	16.99M
	Net Income Common Stockholders
2.12M	3.40M	-7.14M	8.71M	12.22M	9.86M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
24.66M	27.74M	21.15M	7.06M	6.62M	7.68M
	Total Assets
110.08M	111.48M	105.23M	108.88M	113.70M	102.05M
	Total Debt
3.45M	3.75M	5.08M	4.90M	17.92M	20.68M
	Net Debt
-21.22M	-23.99M	-16.07M	-2.16M	11.30M	13.00M
	Total Liabilities
23.13M	24.05M	23.78M	22.88M	39.27M	42.51M
	Stockholders Equity
86.95M	87.43M	81.44M	86.00M	74.43M	59.53M
Cash Flow		Free Cash Flow
4.75M	6.25M	15.64M	11.78M	3.32M	20.93M
	Operating Cash Flow
5.52M	7.19M	15.98M	12.62M	5.22M	21.23M
	Investing Cash Flow
-796.00K	-941.00K	-216.00K	-818.00K	-2.08M	-9.63M
	Financing Cash Flow
761.00K	654.00K	-1.58M	-10.41M	-4.09M	-6.71M

Mastech Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.39
• 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 6.39 is below the 20-day moving average (MA) of 7.20, below the 50-day MA of 7.70, and below the 200-day MA of 10.85, indicating a bearish trend. The MACD of -0.40 indicates Positive momentum. The RSI at 36.90 is Neutral, neither overbought nor oversold. The STOCH value of 17.89 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
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
DHX	63 Neutral	$125.29M	268.89	-7.21%	―	-7.42%	-567.61%
HQI	63 Neutral	$140.00M	41.05	5.67%	2.40%	-7.66%	-34.08%
MHH	61 Neutral	$78.23M	36.58	2.52%	―	3.93%	―
BGSF	60 Neutral	$44.66M	―	-3.95%	4.69%	-12.93%	-159.19%
HSON	50 Neutral	$23.27M	―	-8.66%	―	-9.28%	-244.22%
TBI	50 Neutral	$184.26M	―	-36.98%	―	-16.76%	-1127.93%

Mastech Holdings Corporate Events

Mastech Holdings Approves Stock Incentive Plan Expansion

On May 14, 2025, Mastech Digital, Inc. held its Annual Meeting where shareholders elected two Class II directors, approved an amendment to increase the number of shares in the stock incentive plan by 800,000, and endorsed the compensation of executive officers. The meeting also included advisory votes on executive compensation and its frequency, which are non-binding.

The most recent analyst rating on (MHH) stock is a Hold with a $15.00 price target. To see the full list of analyst forecasts on Mastech Holdings stock, see the MHH Stock Forecast page.

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.