Robert Half (RHI) AI Stock Analysis

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Robert Half

(NYSE:RHI)

60Neutral

Robert Half's overall stock performance is moderate. While the company maintains financial stability with low leverage, it faces challenges with declining revenue and profitability. Technical indicators are bearish, suggesting potential downside risk. The valuation is not particularly attractive, though the dividend yield is a positive aspect. Mixed results from the earnings call highlight growth in some areas but ongoing challenges in others.

Positive Factors

Growth Prospects

Robert Half International is upgraded to Buy from Hold, reflecting confidence in its future growth prospects.

Mergers and Acquisitions

Protiviti, a segment of Robert Half International, is expected to benefit from a resurgence in mergers and acquisitions.

Revenue Growth

Protiviti outperforms with revenue growth of +6.4%, beating consensus and gaining share against the Big 4.

Negative Factors

Earnings Guidance

4Q24 EPS guidance was below prior consensus, indicating anticipated challenges in financial performance.

Macro Environment

The timing of the next upcycle remains uncertain for now due to the uncertain macro environment.

Revenue Decline

Talent Solutions revenues fell 13.2% year-over-year, reflecting ongoing challenges in this segment.

Robert Half (RHI) vs. S&P 500 (SPY)

Market Cap

$5.05B

Dividend Yield4.41%

Average Volume (3M)1.64M

Price to Earnings (P/E)20.2

Beta (1Y)1.07

Revenue Growth-9.33%

EPS Growth-37.06%

CountryUS

Employees14,700

SectorIndustrials

Sector Strength70

IndustryStaffing & Employment Services

Share Statistics

EPS (TTM)2.44

Shares Outstanding102,199,470

10 Day Avg. Volume1,410,860

30 Day Avg. Volume1,638,593

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.94

Price to Cash Flow (P/CF)8.80

P/FCF Ratio8.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$58.90

Price Target Upside19.21% Upside

Rating ConsensusHold

Number of Analyst Covering7

Robert Half Business Overview & Revenue Model

Company DescriptionRobert Half International Inc. (RHI) is a global human resource consulting firm based in Menlo Park, California, specializing in professional staffing services and solutions. The company operates across several sectors, including finance, accounting, administrative, legal, information technology, and marketing. Robert Half provides employment services ranging from temporary, full-time, and project-based placements to consulting and managed solutions, catering to businesses of all sizes.

How the Company Makes MoneyRobert Half makes money primarily through its staffing services, which involve placing skilled professionals into temporary, full-time, and project-based roles within client organizations. The company earns revenue by charging client companies a fee for these placements, often calculated as a percentage of the employee's salary. Additionally, Robert Half's consulting and managed solutions segment provides specialized consulting services and project management, generating income through consultancy fees. Key revenue streams include temporary staffing, permanent placement, and consulting services. Strategic partnerships with various companies and a broad client base across diverse industries contribute significantly to its earnings.

Robert Half Financial Statement Overview

Summary

Robert Half's financial performance shows a stable balance sheet with low debt, but declining revenue and profit margins. Cash flow remains strong but is on a declining trend. Overall, the company's financial stability is maintained amid challenges in growth and profitability.

Income Statement

Positive

Robert Half's income statement reveals a decline in total revenue from $7.24 billion in 2022 to $5.80 billion in 2024, indicating a negative revenue growth trend. Gross profit margin remains relatively stable around 39%, while net profit margin has decreased from 9.1% in 2022 to 4.3% in 2024. The EBIT and EBITDA margins have also narrowed, indicating potential cost pressures or decreased operational efficiency. Overall, profitability has been challenged, but gross profit margins suggest some level of stability.

Balance Sheet

Positive

The balance sheet shows a healthy equity ratio of 48.3% in 2024, reflecting a balanced capital structure. The debt-to-equity ratio remains low at 0.17, indicating conservative leverage. Return on equity has decreased over time, from 42% in 2022 to 18.3% in 2024, highlighting reduced profitability impacting shareholder returns. Overall, the balance sheet indicates financial stability with low leverage but signals weakening profitability.

Cash Flow

Positive

Cash flow analysis highlights robust free cash flow generation, although free cash flow has decreased from $622.6 million in 2022 to $354.2 million in 2024. The operating cash flow to net income ratio has improved, indicating strong cash conversion efficiency. However, free cash flow to net income has also declined, suggesting reduced cash generation relative to profitability. Overall, cash flow remains strong, albeit with some declining trends.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.80B	6.39B	7.24B	6.46B	5.11B
	Gross Profit
2.25B	2.58B	3.09B	2.70B	2.01B
	EBIT
242.69M	467.47M	1.06B	681.43M	270.16M
	EBITDA
330.79M	563.56M	1.02B	796.96M	408.85M
	Net Income Common Stockholders
251.60M	411.15M	657.92M	598.63M	306.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
537.58M	731.74M	658.63M	619.00M	574.43M
	Total Assets
2.85B	3.01B	2.96B	2.95B	2.56B
	Total Debt
233.52M	241.90M	237.85M	265.08M	302.71M
	Net Debt
-304.06M	-489.84M	-420.77M	-353.92M	-271.71M
	Total Liabilities
1.48B	1.42B	1.40B	1.57B	1.35B
	Stockholders Equity
1.38B	1.59B	1.57B	1.38B	1.21B
Cash Flow		Free Cash Flow
354.15M	591.01M	622.63M	566.52M	563.15M
	Operating Cash Flow
410.47M	636.88M	683.75M	603.14M	596.53M
	Investing Cash Flow
-87.12M	-112.25M	-116.62M	-87.61M	9.46M
	Financing Cash Flow
-496.44M	-460.54M	-509.18M	-458.59M	-315.32M

Robert Half Technical Analysis

Technical Analysis Sentiment

Negative

Last Price49.41

Price Trends

50DMA

55.71

Negative

100DMA

63.36

Negative

200DMA

63.68

Negative

Market Momentum

MACD

-1.23

Negative

RSI

42.61

Neutral

STOCH

60.80

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RHI, the sentiment is Negative. The current price of 49.41 is below the 20-day moving average (MA) of 52.29, below the 50-day MA of 55.71, and below the 200-day MA of 63.68, indicating a bearish trend. The MACD of -1.23 indicates Negative momentum. The RSI at 42.61 is Neutral, neither overbought nor oversold. The STOCH value of 60.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RHI.

Robert Half Risk Analysis

Robert Half disclosed 29 risk factors in its most recent earnings report. Robert Half 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

Robert Half Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSP	77 Outperform	$3.09B	34.62	95.48%	2.82%	1.47%	-45.91%
KFY	74 Outperform	$3.30B	13.75	13.92%	2.48%	-3.27%	62.57%
HSII	68 Neutral	$826.60M	98.32	1.91%	1.46%	7.15%	-83.77%
MAN	68 Neutral	$2.37B	16.89	6.67%	6.07%	-5.61%	77.92%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%
KFRC	61 Neutral	$870.89M	17.00	32.14%	3.36%	-8.26%	-14.80%
RHI	60 Neutral	$5.05B	20.23	16.96%	4.41%	-9.33%	-37.06%

* Industrials Sector Average

Performance Comparison

RHI

Robert Half

49.41

-18.83

-27.59%

HSII

Heidrick & Struggles

41.16

11.42

38.40%

NSP

Insperity

85.13

-17.31

-16.90%

KFRC

Kforce

45.57

-17.21

-27.41%

KFY

Korn Ferry

63.96

4.51

7.59%

MAN

ManpowerGroup

51.10

-16.35

-24.24%

Robert Half Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: -27.85% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with notable achievements in Protiviti's growth, strong cash flows, and increased dividends. However, these were offset by declines in global revenues and Talent Solutions, as well as decreased earnings per share. The rise in business confidence is a positive sign, but challenges remain with currency impacts and increased SG&A costs.

Highlights

Protiviti Revenue Growth

Protiviti reported year-on-year revenue growth for the second consecutive quarter, with global revenues up 5% and U.S. revenues up 6%.

Strong Cash Flow

Cash flow from operations was $155 million during the fourth quarter.

Dividend Increase

The December 2024 dividend was 10.4% higher than the prior year, with a cash outlay of $54 million.

Positive Business Confidence

A significant rise in U.S. business confidence followed the recent elections, with the NFIB's Small Business Optimism Index seeing a large two-month increase.

Recognition and Awards

Protiviti was recognized on Glassdoor's Best Places to Work list and honored by Seramount as a top company for executive women. Robert Half was named one of Fortune's most admired companies for the 28th consecutive year.

Lowlights

Decrease in Global Revenues

Global enterprise revenues were $1.382 billion, down 6% from the previous year's fourth quarter.

Talent Solutions Revenue Decline

Fourth-quarter Talent Solutions revenues were down 12% year-over-year, with U.S. revenues down 11% and Non-U.S. revenues down 14%.

Earnings Decline

Debt income per share in the fourth quarter was $0.53 compared to $0.83 in the previous year.

Currency Fluctuations Impact

Currency exchange rate movements decreased reported year-over-year total revenues by $4 million.

Increased SG&A Costs

Enterprise SG&A costs were 34.1% of global revenues compared to 35.1% in the previous year.

Company Guidance

During Robert Half's Fourth Quarter 2024 Conference Call, the company provided guidance and insights into its performance metrics. For the quarter, global enterprise revenues were $1.382 billion, reflecting a 6% decrease year-over-year. Earnings per share dropped to $0.53 from $0.83 in the prior year's fourth quarter. Protiviti, a key division, reported consecutive quarterly year-over-year revenue growth, contributing to a stable performance. The company's cash flow from operations was $155 million, and a $0.53 per share cash dividend was distributed, marking a 10.4% increase from the previous year. The return on invested capital was 15%, with 1 million shares repurchased for $77 million. For Q1 2025, projected revenues range from $1.35 billion to $1.45 billion, with income per share expected between $0.31 and $0.41. The anticipated growth for Protiviti is between 8% and 10%, while Talent Solutions is expected to decline by 7% to 10%. The tax rate is projected at 31% to 35%, with capital expenditures estimated between $75 million and $95 million for the year. The company noted improved business confidence and labor market conditions, with Protiviti poised for continued growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.