Kelly Services (KELYA) AI Stock Analysis

• Market Cap: $442.68M
• Dividend Yield: 2.39%
• Average Volume (3M): 300.99K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.81
• Revenue Growth: 0.97%
• EPS Growth: -112.75%
• Country: US
• Employees: 5,570
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 0.54
• Shares Outstanding: 31,955,845
• 10 Day Avg. Volume: 240,956
• 30 Day Avg. Volume: 300,988
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 0.12
• Enterprise Value/Gross Profit: 0.59
• Enterprise Value/Ebitda: 14.21
• 1Y Price Target: $26.00
• Price Target Upside: 107.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 48 Neutral
• Price Target: $12.50 ▼(-0.48% Downside)

Kelly Services faces significant challenges with profitability and bearish technical indicators, which weigh heavily on the stock score. While revenue growth and a stable balance sheet are positives, they are overshadowed by operational inefficiencies and negative market momentum. The earnings call highlights mixed performance, further contributing to a cautious outlook.

Positive Factors

Revenue Growth

Strong revenue growth indicates expanding market presence and effective service offerings, suggesting resilience in core business operations.

CEO Transition

New leadership with a focus on profitable growth and value creation can drive strategic evolution and enhance long-term competitiveness.

Cash Flow Improvement

Improving cash flow enhances financial flexibility, allowing for strategic investments and debt reduction, supporting long-term stability.

Negative Factors

Profitability Challenges

Negative profitability metrics highlight operational inefficiencies, which may hinder long-term financial health and shareholder returns.

Demand Reduction

Reduced demand from key clients can impact revenue stability and growth prospects, necessitating strategic adjustments to mitigate risks.

Earnings Decline

Declining earnings per share reflect challenges in maintaining profitability, which could affect investor confidence and long-term growth potential.

Kelly Services Business Overview & Revenue Model

Company Description

Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Professional & Industrial segment delivers staffing, outcome-based, and direct-hire services in the areas of office, professional, light industrial, and contact center specialties. The Science, Engineering & Technology segment offers staffing, outcome-based, and direct-hire services in the areas of science and clinical research, engineering, information technology, and telecommunications specialties. The Education segment provides staffing and executive search services to early childhood, and higher education markets. The Outsourcing & Consulting segment offers recruitment process outsourcing (RPO), payroll process outsourcing, and talent advisory services, as well as managed services. The International segment provides staffing, RPO, and direct-hire services in Europe and Mexico. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, the United Kingdom, Italy, Germany, Ireland, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.

How the Company Makes Money

Kelly Services generates revenue primarily through the placement of temporary and permanent staff in client organizations. The company charges fees based on a markup of the employee's hourly wage or a percentage of the employee's annual salary for permanent placements. Key revenue streams include the staffing services for various sectors, managed service provider (MSP) solutions, and recruitment process outsourcing (RPO). Additionally, Kelly Services has established strategic partnerships with various organizations to enhance its service offerings and expand its market reach, contributing to its overall earnings. The company also benefits from a diverse client base, reducing dependency on any single sector or customer.

Kelly Services Financial Statement Overview

Summary

Kelly Services shows strong revenue growth but struggles with profitability and operational efficiency. The balance sheet is stable with low leverage, but negative returns on equity are concerning. Cash flow is improving, yet not translating into consistent profitability.

Income Statement

Kelly Services shows a mixed performance in its income statement. The company has experienced a significant revenue growth rate of 99.5% in the TTM period, indicating strong top-line growth. However, profitability metrics such as the net profit margin and EBIT margin are negative, reflecting ongoing challenges in achieving operational efficiency. The gross profit margin remains stable, but the negative net income suggests that cost management needs improvement.

Balance Sheet

The balance sheet of Kelly Services is relatively stable, with a low debt-to-equity ratio of 0.106 in the TTM period, indicating conservative leverage. However, the return on equity is negative, which is a concern for shareholders. The equity ratio remains healthy, suggesting a solid capital structure, but the company needs to improve its profitability to enhance shareholder returns.

Cash Flow

The cash flow statement shows a positive trend in free cash flow growth, with a significant increase of 58.3% in the TTM period. The operating cash flow to net income ratio is positive, indicating that the company is generating cash from its operations despite negative net income. However, the free cash flow to net income ratio suggests that cash generation is not yet translating into profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.50B	4.33B	4.84B	4.97B	4.91B	4.52B
Gross Profit	902.40M	882.60M	961.40M	1.01B	919.20M	827.60M
EBITDA	37.20M	39.90M	78.20M	-13.40M	241.10M	-59.10M
Net Income	-6.20M	-600.00K	36.40M	-63.30M	156.10M	-72.80M
Balance Sheet
Total Assets	2.51B	2.63B	2.58B	2.66B	2.89B	2.56B
Cash, Cash Equivalents and Short-Term Investments	18.00M	39.00M	125.80M	153.70M	112.70M	223.00M
Total Debt	133.90M	302.60M	51.30M	70.40M	78.90M	87.40M
Total Liabilities	1.25B	1.40B	1.33B	1.41B	1.56B	1.36B
Stockholders Equity	1.27B	1.23B	1.25B	1.25B	1.34B	1.20B
Cash Flow
Free Cash Flow	105.10M	15.80M	61.40M	-88.30M	73.80M	170.50M
Operating Cash Flow	114.00M	26.90M	76.70M	-76.30M	85.00M	186.00M
Investing Cash Flow	16.20M	-361.60M	-14.10M	167.50M	-180.70M	9.80M
Financing Cash Flow	-159.50M	214.80M	-59.60M	-50.60M	-8.10M	-8.10M

Kelly Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KELYA, the sentiment is Negative. The current price of 12.56 is below the 20-day moving average (MA) of 12.68, below the 50-day MA of 13.38, and below the 200-day MA of 12.78, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 43.08 is Neutral, neither overbought nor oversold. The STOCH value of 57.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KELYA.

Kelly Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BBSI	―	$1.08B	20.66	25.36%	0.76%	9.48%	11.62%
KFRC	―	$517.42M	11.76	29.14%	5.57%	-5.77%	-11.93%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KELYA	―	$442.68M	―	-0.49%	2.39%	0.97%	-112.75%
ZIP	―	$412.07M	―	―	―	-16.20%	-222.75%
TBI	―	$177.01M	-5.19	-10.53%	―	-13.01%	68.18%
MAN	―	$1.53B	―	-1.00%	6.83%	-2.44%	-156.01%

Kelly Services Corporate Events

Kelly Services’ Earnings Call: Mixed Outlook with Strategic Shifts

Kelly Services’ recent earnings call presented a mixed sentiment, reflecting both positive strides and significant challenges. The company reported growth in its Education and SET segments and improvements in gross profit margins. However, these positives were offset by revenue declines in the ETM segment, reduced earnings per share, and significant demand reductions from large customers. These challenges were largely attributed to macroeconomic conditions and specific cost-reduction initiatives by customers. A strategic CEO transition was also highlighted, aimed at driving future growth.

Kelly Services Reports Q2 2025 Earnings Growth

Kelly Services, Inc., a prominent player in the staffing industry, specializes in providing talent solutions across various sectors, including education, engineering, and technology. In its latest earnings report for the second quarter of 2025, Kelly Services reported a revenue of $1.1 billion, marking a 4.2% increase year-over-year, primarily driven by acquisitions. However, the company experienced a 3.3% decline in organic revenue. Operating earnings stood at $22.2 million, with adjusted earnings at $24.6 million, reflecting a 12.1% decrease compared to the previous year. The adjusted EBITDA was $37.0 million, down 8.7% from the prior year, with a margin decrease of 40 basis points to 3.4%. Despite these challenges, Kelly Services saw growth in its Education segment and maintained a focus on aligning resources with demand. Looking ahead, the company anticipates a revenue decline of 5% to 7% in the third quarter due to reduced demand from U.S. federal contractors and certain large customers. However, it expects an expansion in adjusted EBITDA margin by 80 to 90 basis points in the same period, with modest margin improvement for the full year.

Kelly Services Appoints New Chief Accounting Officer

On August 7, 2025, Kelly Services announced the appointment of Nicholas A. Zuhlke as Vice President, Controller, and Chief Accounting Officer, effective August 11, 2025, succeeding Laura Lockhart. Zuhlke brings extensive experience from his previous roles at DexKo Global Holdings Inc. and other companies. In its second-quarter earnings report, Kelly Services reported a 4.2% year-over-year revenue increase to $1.1 billion, primarily due to acquisitions, despite a 3.3% organic decline. The company experienced a decrease in operating earnings and adjusted EBITDA compared to the previous year, with expectations of a revenue decline in Q3 due to reduced demand from U.S. federal contractors. Kelly remains focused on growth in resilient markets and aligning resources with demand, aiming for future margin improvements.

The most recent analyst rating on (KELYA) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.

Kelly Services Appoints Christopher Layden as New CEO

On August 7, 2025, Kelly Services announced the appointment of Christopher Layden as the new President and CEO, effective September 2, 2025, succeeding Peter Quigley, who will retire but remain as a strategic advisor and board member until May 2026. Layden, previously COO at Prolink, brings extensive experience in workforce solutions and is expected to drive Kelly’s strategic evolution, focusing on profitable growth and value creation, building on the progress made under Quigley’s leadership.

The most recent analyst rating on (KELYA) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Kelly Services stock, see the KELYA Stock Forecast page.