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Mastech (MHH)
XASE:MHH
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Mastech Holdings
(NYSE MKT:MHH)
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Rating:56Neutral
Price Target:
$7.50
▼(-4.82% Downside)
Mastech Holdings' overall stock score reflects its financial challenges, particularly in profitability and revenue growth, despite a strong balance sheet and cash flow. Technical indicators suggest a lack of strong momentum, and valuation metrics are poor due to negative earnings. The earnings call provides some optimism with strategic initiatives, but immediate challenges remain significant.
Positive Factors
Strong Liquidity Position
A strong liquidity position with substantial cash reserves and no bank debt enhances financial flexibility, enabling strategic investments and resilience against market fluctuations.
EDGE Program Initiative
The EDGE program focuses on efficiency and cost management, which can lead to improved operational performance and long-term profitability through streamlined processes and disciplined spending.
Record Gross Margins
Record gross margins indicate effective pricing strategies and high-value engagements, which can sustain profitability and competitive positioning in the IT staffing market.
Negative Factors
Decline in Revenue
A decline in revenue from key segments indicates challenges in market demand or competitive pressures, potentially impacting long-term growth and market share.
Reduced Consultant Headcount
A reduction in consultant headcount can limit service capacity and client engagement, affecting revenue generation and client satisfaction over time.
Decreased Bookings in Data and Analytics
Decreased bookings in the Data and Analytics segment suggest weakening demand or competitive challenges, which could hinder future revenue and strategic growth in this area.
Mastech Holdings (MHH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$80.95M
Dividend YieldN/A
Average Volume (3M)34.29K
Price to Earnings (P/E)―
Beta (1Y)0.97
Revenue Growth1.24%
EPS Growth97.14%
CountryUS
Employees1,525
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.29
Shares Outstanding11,697,331
10 Day Avg. Volume46,763
30 Day Avg. Volume34,294
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)1.99
Price to Sales (P/S)0.87
P/FCF Ratio27.81
Enterprise Value/Market Cap0.75
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit1.13
Enterprise Value/Ebitda12.40
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Mastech Holdings Business Overview & Revenue Model
Company DescriptionMastech Holdings, Inc. (MHH) is a provider of IT staffing services and digital transformation solutions, primarily operating in the technology and consulting sectors. The company specializes in delivering skilled IT professionals, including data scientists, project managers, and software developers, to meet the increasing demand for digital solutions across various industries. Mastech also focuses on offering IT training and education services, enhancing the skills of professionals to align with evolving technological trends.
How the Company Makes MoneyMastech Holdings generates revenue primarily through its IT staffing services, which involve placing qualified professionals in contract and permanent roles within client organizations. The company charges clients a fee for these staffing services, typically based on a percentage of the employee's salary or a fixed rate for contract placements. Additionally, Mastech earns revenue from its digital transformation solutions, which include consulting services and project-based engagements aimed at helping businesses adopt new technologies and improve operational efficiency. Key revenue streams include fees from staffing contracts, consulting projects, and training services. The company may also benefit from strategic partnerships with technology providers and industry associations that expand its service offerings and client base, contributing to its overall earnings growth.
Mastech Holdings Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
The earnings call revealed a mixed performance with strategic initiatives like the EDGE program and strong liquidity position showing promise for future growth. However, significant declines in both revenue segments and consultant headcount pose challenges. The company is focusing on high-value engagements and operational efficiency, yet immediate results are tempered by current market conditions.Q3-2025 Updates
Positive Updates
Launch of EDGE Program
Introduction of the EDGE initiative aimed at optimizing the organization and operating model, focusing on revenue quality, process simplification, and disciplined spend management.
Record Gross Margins
Achieved Mastech's record gross margins of 24.8% in the IT Staffing Services segment due to disciplined pricing and higher-value engagements.
Non-GAAP Financial Performance
Non-GAAP net income increased to $3.5 million or $0.29 per diluted share from $2.8 million or $0.23 per diluted share in the prior year period.
Strong Liquidity Position
Ended the quarter with $32.7 million in cash, no bank debt, and $20.8 million available under the credit facility.
Negative Updates
Decline in IT Staffing and Data Analytics Revenue
IT Staffing Services segment revenue declined 4.4% year-over-year, and Data and Analytics Services segment revenue fell 15.8% year-over-year.
Reduced Billable Consultant Headcount
Billable consultant headcount reduced by 11.6% year-over-year, impacting overall client activity.
Decreased Bookings in Data and Analytics
Data and Analytics Services segment's bookings decreased to $6.1 million from $11.1 million in the prior year period.
Third Quarter GAAP Net Income Decline
GAAP net income decreased to $0.9 million or $0.08 per diluted share from $1.9 million or $0.16 per diluted share in the prior year period.
Company Guidance
During the Mastech Digital, Inc. Third Quarter 2025 Earnings Conference Call, management emphasized their strategic focus on quality over quantity, as evidenced by a 4% increase in average bill rates to $86.60 and record gross margins of 24.8% in the IT Staffing Services segment, despite a 11.6% reduction in billable consultant headcount. The company reported a year-over-year revenue decline of 6.4% to $48.5 million, with IT Staffing Services revenue down 4.4% and Data and Analytics Services revenue down 15.8%. Mastech Digital launched the EDGE program—Efficiencies Driving Growth and Expansion—aimed at optimizing their operating model, which has already improved operational efficiency and resource alignment. The program focuses on cost diagnostics, process simplification, and disciplined spend management, resulting in a 280 basis point decrease in SG&A as a percentage of revenue. Despite a GAAP net income decrease to $0.9 million from $1.9 million, adjustments for non-GAAP measures show net income increased to $3.5 million from $2.8 million year-over-year. The company also repurchased approximately 192,000 shares, reflecting their commitment to returning capital to shareholders. Management did not provide future guidance, maintaining a focus on strategic investments in AI and data modernization to drive long-term sustainable growth.Mastech Holdings Financial Statement Overview
Summary
Mastech Holdings faces challenges with declining revenue and profitability margins, impacting its income statement performance. However, the balance sheet remains strong with low leverage, and cash flow metrics indicate robust cash generation. The company needs to address operational inefficiencies to improve profitability while maintaining its financial stability.Income Statement
Mastech Holdings has experienced declining revenue growth, with a negative trend in recent years, including a -1.67% in TTM. Gross profit margin remains relatively stable at around 27.77% in TTM, but net profit margin has significantly decreased to 0.43% in TTM, indicating profitability challenges. The EBIT and EBITDA margins have also declined, reflecting operational inefficiencies.45
Neutral
Balance Sheet
The company's balance sheet shows a low debt-to-equity ratio of 0.036 in TTM, indicating low leverage and financial stability. However, return on equity has decreased to 0.996% in TTM, suggesting reduced profitability for shareholders. The equity ratio remains strong, reflecting a solid capital structure.65
Positive
Cash Flow
Mastech Holdings has shown a strong free cash flow growth rate of 42.16% in TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.387, suggesting efficient cash conversion. The free cash flow to net income ratio is high at 0.953, highlighting strong cash flow relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 196.66M | 198.94M | 201.10M | 242.24M | 222.01M | 194.10M |
| Gross Profit | 54.24M | 55.60M | 51.04M | 63.18M | 59.44M | 51.54M |
| EBITDA | 4.92M | 9.39M | -5.18M | 17.79M | 18.85M | 17.64M |
| Net Income | -66.00K | 3.40M | -7.14M | 8.71M | 12.22M | 9.86M |
Balance Sheet | ||||||
| Total Assets | 112.62M | 111.48M | 105.23M | 108.88M | 114.07M | 102.05M |
| Cash, Cash Equivalents and Short-Term Investments | 32.75M | 27.74M | 21.15M | 7.06M | 6.62M | 7.68M |
| Total Debt | 2.75M | 3.75M | 5.08M | 4.90M | 18.29M | 20.68M |
| Total Liabilities | 24.61M | 24.05M | 23.78M | 22.88M | 39.64M | 42.51M |
| Stockholders Equity | 88.01M | 87.43M | 81.44M | 86.00M | 74.43M | 59.53M |
Cash Flow | ||||||
| Free Cash Flow | 10.35M | 6.25M | 15.64M | 11.78M | 3.32M | 20.93M |
| Operating Cash Flow | 10.81M | 7.19M | 15.98M | 12.62M | 5.22M | 21.23M |
| Investing Cash Flow | -485.00K | -941.00K | -216.00K | -818.00K | -2.08M | -9.63M |
| Financing Cash Flow | -834.00K | 654.00K | -1.58M | -10.41M | -4.09M | -6.71M |
Mastech Holdings Technical Analysis
Negative
7.88
Price Trends
7.23
Negative
7.32
Negative
7.41
Negative
Market Momentum
-0.04
Positive
46.10
Neutral
44.01
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 7.88 is above the 20-day moving average (MA) of 7.17, above the 50-day MA of 7.23, and above the 200-day MA of 7.41, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 46.10 is Neutral, neither overbought nor oversold. The STOCH value of 44.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MHH.
Mastech Holdings Risk Analysis
Mastech Holdings disclosed 1 risk factors in its most recent earnings report. Mastech Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mastech Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $154.32M | 22.03 | 11.08% | 2.55% | -12.65% | 368.36% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $61.71M | -7.27 | -14.43% | 41.67% | -36.79% | -507.05% | |
56 Neutral | $80.95M | -865.00 | -0.08% | ― | 1.24% | 97.14% | |
51 Neutral | $22.66M | -0.65 | -51.65% | ― | -15.43% | -43.45% | |
50 Neutral | $79.70M | -5.69 | -12.89% | ― | -9.13% | -1032.39% | |
42 Neutral | $4.98M | -0.52 | -78.12% | ― | -7.26% | -1.37% |
* Industrials Sector Average
MHH
Mastech Holdings
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IPDN
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1.02
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BGSF
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HQI
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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.