As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at professional staffing & hr solutions stocks, starting with First Advantage (NASDAQ:FA).
The Professional Staffing & HR Solutions subsector within Business Services is set to benefit from evolving workforce trends, including the rise of remote work and the gig economy. With companies casting a wider net to find talent due to remote work, the expertise of staffing and recruiting companies is even more valuable. For those who invest wisely, the use of predictive AI in recruitment and screening as well as automation in HR workflows can enhance efficiency and scalability. On the other hand, digitization means that talent discovery is less of a manual process, opening the door for tech-first platforms. Additionally, regulatory scrutiny around data privacy in HR is evolving and may require companies in this sector to change their go-to-market strategies over time.
The 7 professional staffing & hr solutions stocks we track reported a slower Q1. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was in line.
While some professional staffing & hr solutions stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.8% since the latest earnings results.
Best Q1: First Advantage (NASDAQ:FA)
Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ:FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
First Advantage reported revenues of $354.6 million, up 109% year on year. This print exceeded analysts’ expectations by 2.9%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
“We are pleased that First Advantage delivered solid financial performance in the first quarter, exceeding our expectations. We are continuing to see strong traction through upsell, cross-sell, and new logos, with sequential quarterly improvement in the base business and continued high customer retention levels. Our focused vertical strategy, with a depth of expertise across a broad range of industries, is delivering results and providing balance in the current environment,” said Scott Staples, Chief Executive Officer.
First Advantage Total Revenue
First Advantage achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 15.5% since reporting and currently trades at $17.30.
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Barrett reported revenues of $292.6 million, up 10.1% year on year, outperforming analysts’ expectations by 2.3%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates.
Barrett Total Revenue
The market seems content with the results as the stock is up 2% since reporting. It currently trades at $41.60.
With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE:RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.
Robert Half reported revenues of $1.35 billion, down 8.4% year on year, falling short of analysts’ expectations by 4.3%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
Robert Half delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 1.9% since the results and currently trades at $45.58.
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
ManpowerGroup reported revenues of $4.09 billion, down 7.1% year on year. This number topped analysts’ expectations by 2.9%. However, it was a slower quarter as it logged a significant miss of analysts’ EPS guidance for next quarter estimates and a significant miss of analysts’ EPS estimates.
The stock is down 13.6% since reporting and currently trades at $42.72.
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Alight reported revenues of $548 million, down 2% year on year. This result surpassed analysts’ expectations by 1.2%. It was a strong quarter as it also recorded an impressive beat of analysts’ EPS guidance for next quarter estimates and full-year revenue guidance meeting analysts’ expectations.
Alight had the weakest full-year guidance update among its peers. The stock is up 4.5% since reporting and currently trades at $5.47.
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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