Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Professional Services industry. The net income has significantly decreased by 588.8% when compared to the same quarter one year ago, falling from $6.79 million to -$33.17 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Professional Services industry and the overall market, KFORCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $5.23 million or 63.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for KFORCE INC is currently lower than what is desirable, coming in at 32.80%. Regardless of KFRC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, KFRC's net profit margin of -12.10% significantly underperformed when compared to the industry average.
- KFORCE INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KFORCE INC increased its bottom line by earning $0.61 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.61).
Kforce Inc., together with its subsidiaries, provides professional and technical staffing services and solutions in the United States. It operates in five segments: Technology, Finance and Accounting, Clinical Research, Health Information Management, and Government Solutions. Kforce has a market cap of $452.4 million and is part of the
industry. Shares are up 1.3% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff