The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Kforce (NYSE:KFRC) and the rest of the professional staffing & hr solutions stocks fared in Q1.
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.
In light of this news, share prices of the companies have held steady as they are up 2.4% on average since the latest earnings results.
Kforce (NYSE:KFRC)
With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE:KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.
Kforce reported revenues of $330 million, down 6.2% year on year. This print fell short of analysts’ expectations by 1%. Overall, it was a softer quarter for the company with a miss of analysts’ EPS estimates.
Kforce Total Revenue
Unsurprisingly, the stock is down 1.3% since reporting and currently trades at $42.09.
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, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
First Advantage Total Revenue
First Advantage pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 20.9% since reporting. It currently trades at $18.10.
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. Interestingly, the stock is up 4.2% since the results and currently trades at $48.43.
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 print topped analysts’ expectations by 1.2%. More broadly, it was a mixed quarter as it also recorded a miss of analysts’ EPS estimates.
Alight had the weakest full-year guidance update among its peers. The stock is up 10% since reporting and currently trades at $5.76.
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. This number beat analysts’ expectations by 2.3%. It was an exceptional quarter as it also produced an impressive beat of analysts’ EPS estimates.
The stock is up 4% since reporting and currently trades at $42.42.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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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