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Mastech Holdings Inc (MHH)
:MHH
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Mastech Holdings
(NYSE MKT:MHH)
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Rating:53Neutral
Price Target:
$8.00
▲(11.58% Upside)
Mastech Holdings' overall stock score is primarily impacted by its financial performance challenges, including declining revenue and profit margins. The high P/E ratio suggests overvaluation, further weighing down the score. While the company maintains a stable balance sheet and cash flow improvements, these are offset by revenue declines and reduced order bookings highlighted in the earnings call.
Mastech Holdings (MHH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$84.49M
Dividend YieldN/A
Average Volume (3M)10.52K
Price to Earnings (P/E)103.5
Beta (1Y)0.95
Revenue Growth5.16%
EPS GrowthN/A
CountryUS
Employees1,525
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding11,784,183
10 Day Avg. Volume11,787
30 Day Avg. Volume10,520
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.72
Enterprise Value/Revenue0.30
Enterprise Value/Gross Profit1.10
Enterprise Value/Ebitda16.68
Forecast
1Y Price Target
$8.00Price Target Upside11.58% Upside
Rating ConsensusHold
Number of Analyst Covering1
Mastech Holdings Business Overview & Revenue Model
Company DescriptionMastech Digital, Inc., together with its subsidiaries, provides digital transformation IT services to large, medium-sized, and small companies in the United States. It operates through two segments, Data and Analytics Services, and IT Staffing Services. The company offers data management and analytics services, including project-based consulting services in the areas of master data management, enterprise data integration, big data and analytics, and digital transformation by using onsite and offshore resources. It also provides a range of IT staffing services in the areas of data management and analytics, cloud, mobility, social, automation, business intelligence/data warehousing, web services, enterprise resource planning and customer resource management, and e-business solutions. In addition, the company offers digital transformation services, such as digital learning services; and cloud-based enterprise application across sales, marketing, and customer service organizations. It provides its services across various industry verticals, including financial services, government, healthcare, manufacturing, retail, technology, telecommunications, and transportation. The company was formerly known as Mastech Holdings, Inc. and changed its name to Mastech Digital, Inc. in September 2016. Mastech Digital, Inc. was founded in 1986 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyMastech Holdings generates revenue primarily through its IT staffing services, which involve the placement of technology professionals in various roles and projects within client organizations. The company earns fees based on the hourly billing rates for the professionals it places, as well as through direct hire placements where it charges a percentage of the candidate's first-year salary. Additionally, Mastech's Digital Transformation Services provide another revenue stream by offering consulting and project-based solutions that help clients enhance their digital capabilities. Strategic partnerships with technology firms and a robust network of candidate relationships also contribute significantly to its earnings, allowing Mastech to meet client demands efficiently and effectively.
Mastech Holdings Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautious but stabilizing market with strong gross margin performance and solid financial position as key positives. However, notable revenue declines and reduced order bookings indicate significant challenges.Q2-2025 Updates
Positive Updates
Gross Margin Performance
Achieved highest gross margin to date in the second quarter through focus on revenue quality, particularly among Financial Services clients.
Liquidity and Financial Position
Maintained a solid financial position with a cash balance of $27.9 million, no bank debt, and $22.2 million cash availability under a revolving credit facility.
Strategic Initiatives Progress
Significant progress on strategic initiatives, including transitioning finance and accounting functions to India, aiming to complete by Q4 2025.
Partnership with Informatica
Initial progress in building a differentiated offering through partnership with Informatica, creating joint solution offerings.
Negative Updates
Revenue Decline
Consolidated revenue decreased by 0.9% year-over-year, with IT Staffing Services revenue down 0.4% and Data and Analytics Services revenue down 3.2%.
Order Bookings Decrease
Second quarter order bookings totaled $5.8 million, significantly below last year's Q2 performance of $9.2 million.
Decline in Net Income
GAAP net income for Q2 2025 was $0.1 million, a sharp decline from $1.4 million in Q2 2024. Non-GAAP net income also decreased year-over-year.
Company Guidance
During the Mastech Digital Second Quarter 2025 Earnings Conference Call, the company did not provide guidance for future quarters, nor will it offer guidance in subsequent one-on-one meetings. However, they did discuss several financial metrics from the second quarter of 2025, highlighting a consolidated revenue of $49.1 million, which marked a 0.9% year-over-year decrease from Q2 2024. The Data and Analytics Services segment reported $8.6 million in revenue, a 3.2% decline compared to the previous year. Order bookings for the same segment totaled $5.8 million, down from $9.2 million in Q2 2024. The IT Staffing Services segment saw a slight revenue decline to $40.5 million, down 0.4% from the previous year. Despite these challenges, the company achieved its highest gross margin to date in the second quarter, attributed to a focus on revenue quality. The call also noted a decline in the billable consultant base by 11 consultants, and a consolidated gross profit decrease of 1.1% compared to Q2 2024. Additionally, Mastech Digital reported a GAAP net income of $0.1 million or $0.01 per diluted share, compared to $1.4 million or $0.12 per diluted share the previous year. Non-GAAP net income was $1.8 million or $0.15 per diluted share, down from $2.2 million or $0.19 per diluted share in Q2 2024. The company ended the quarter with a $27.9 million cash balance and no bank debt, with $22.2 million available under its revolving credit facility.Mastech Holdings Financial Statement Overview
Summary
Mastech Holdings faces challenges in revenue and profit growth, with declining margins impacting overall profitability. The balance sheet remains stable with low leverage, but declining ROE is a concern. Cash flow performance shows improvement, though historical volatility suggests potential risks. Overall, the company needs to address revenue and margin pressures while maintaining its strong cash flow position.Income Statement
Mastech Holdings has experienced declining revenue growth, with a negative trend over the past few years, particularly a sharp decline in the TTM period. Profit margins have also decreased significantly, with net profit margin dropping to a low level in the TTM period. While gross profit margin remains relatively stable, the decline in EBIT and EBITDA margins indicates challenges in operational efficiency.45
Neutral
Balance Sheet
The company maintains a low debt-to-equity ratio, indicating prudent leverage management. However, return on equity has decreased over time, reflecting reduced profitability. The equity ratio remains healthy, suggesting a stable financial position despite the declining ROE.65
Positive
Cash Flow
Cash flow metrics show improvement, with significant growth in free cash flow in the TTM period. The operating cash flow to net income ratio indicates strong cash generation relative to earnings. However, the volatility in free cash flow growth over the years suggests potential instability in cash flow management.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 200.00M | 198.94M | 201.10M | 242.24M | 222.01M | 194.10M |
| Gross Profit | 55.55M | 55.60M | 51.04M | 63.18M | 59.44M | 51.54M |
| EBITDA | 3.66M | 7.29M | -5.18M | 16.39M | 21.54M | 16.99M |
| Net Income | 868.00K | 3.40M | -7.14M | 8.71M | 12.22M | 9.86M |
Balance Sheet | ||||||
| Total Assets | 110.39M | 111.48M | 105.23M | 108.88M | 113.70M | 102.05M |
| Cash, Cash Equivalents and Short-Term Investments | 27.93M | 27.74M | 21.15M | 7.06M | 6.62M | 7.68M |
| Total Debt | 3.14M | 3.75M | 5.08M | 4.90M | 18.29M | 20.68M |
| Total Liabilities | 22.58M | 24.05M | 23.78M | 22.88M | 39.27M | 42.51M |
| Stockholders Equity | 87.81M | 87.43M | 81.44M | 86.00M | 74.43M | 59.53M |
Cash Flow | ||||||
| Free Cash Flow | 7.28M | 6.25M | 15.64M | 11.78M | 3.32M | 20.93M |
| Operating Cash Flow | 7.64M | 7.19M | 15.98M | 12.62M | 5.22M | 21.23M |
| Investing Cash Flow | -378.00K | -941.00K | -216.00K | -818.00K | -2.08M | -9.63M |
| Financing Cash Flow | 340.00K | 654.00K | -1.58M | -10.41M | -4.09M | -6.71M |
Mastech Holdings Technical Analysis
Negative
7.17
Price Trends
7.55
Negative
7.38
Negative
9.05
Negative
Market Momentum
-0.15
Positive
41.23
Neutral
9.52
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MHH, the sentiment is Negative. The current price of 7.17 is below the 20-day moving average (MA) of 7.47, below the 50-day MA of 7.55, and below the 200-day MA of 9.05, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 41.23 is Neutral, neither overbought nor oversold. The STOCH value of 9.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MHH.
Mastech Holdings Risk Analysis
Mastech Holdings disclosed 2 risk factors in its most recent earnings report. Mastech Holdings 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
Mastech Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $123.66M | 50.84 | 4.06% | 2.76% | -9.76% | -53.41% | |
53 Neutral | $84.49M | 103.46 | 1.01% | ― | 5.16% | ― | |
49 Neutral | $102.26M | 268.89 | -8.83% | ― | -8.31% | -445.30% | |
49 Neutral | $41.67M | ― | -9.13% | 52.77% | -24.36% | -393.95% | |
47 Neutral | $22.17M | ― | -53.10% | ― | -15.53% | -67.84% | |
45 Neutral | $15.81M | ― | -68.25% | ― | -11.76% | 48.03% |
* Industrials Sector Average
MHH
Mastech Holdings
7.17
-3.38
-32.04%
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3.85
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BGSF
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HQI
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.