Kforce .com (NYSE: NYSE:KFRC), a professional staffing services firm, received an upgrade in its stock rating from Sidoti.
The firm shifted its stance on Kforce from Neutral to Buy, setting a price target of $71.00.
The upgrade comes with an acknowledgment of the company's earnings per share (EPS) estimate for the third quarter of 2024, which Sidoti maintains at $0.68.
This estimate is an increase from the $0.54 EPS reported in the same quarter of the previous year, which had included nearly $6 million in one-time expenses.
The analyst at Sidoti projects a 6.5% year-over-year decline in revenue for Kforce, attributing the decrease to reduced client activity. This trend is viewed as being in line with the broader industry movements. Despite the anticipated drop in revenue, the firm's outlook has improved enough to warrant the upgrade to a Buy rating.
Kforce had previously provided guidance for the third quarter of 2024 in July, forecasting an EPS range of $0.65 to $0.73. Sidoti's EPS estimate of $0.68 sits comfortably within this range, suggesting confidence in the company's ability to meet its projected earnings.
The new price target of $71.00 suggests a level of optimism about the stock's potential performance. The upgrade and price target reflect a positive shift in expectation for Kforce's financial results despite the challenges posed by the current industry trends.
InvestingPro Insights
To complement Sidoti's upgrade of Kforce.com (NYSE:KFRC), InvestingPro data provides additional context for investors. Despite the anticipated revenue decline noted by Sidoti, Kforce maintains a solid financial foundation. The company's market capitalization stands at $1.07 billion, with a P/E ratio of 20.56, indicating that investors are still willing to pay a premium for its earnings.
InvestingPro Tips highlight that Kforce has raised its dividend for 6 consecutive years, demonstrating a commitment to shareholder returns even in challenging times. This is particularly relevant given the analyst's projection of a revenue decline. Additionally, the company's RSI suggests the stock is in oversold territory, which could align with Sidoti's upgraded outlook and potential for price appreciation.
It's worth noting that Kforce's revenue for the last twelve months as of Q2 2024 was $1.44 billion, with a gross profit margin of 27.48%. While these figures provide a snapshot of the company's recent performance, they also set a baseline for comparing future results against Sidoti's projections.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Kforce, providing a deeper understanding of the company's financial health and market position.
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