Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- KFRC's revenue growth has slightly outpaced the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KFORCE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, KFORCE INC turned its bottom line around by earning $0.32 versus -$0.98 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $0.32).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 102.0% when compared to the same quarter one year prior, rising from $3.09 million to $6.25 million.
- Powered by its strong earnings growth of 111.11% and other important driving factors, this stock has surged by 40.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Professional Services industry and the overall market, KFORCE INC's return on equity is below that of both the industry average and the S&P 500.
Kforce Inc. provides professional and technical specialty staffing services and solutions in the United States and internationally. The company operates through four segments: Technology (Tech), Finance and Accounting (FA), Health Information Management (HIM), and Government Solutions (GS). The company has a P/E ratio of 68.3, above the S&P 500 P/E ratio of 17.7. Kforce has a market cap of $714.7 million and is part of the services sector and diversified services industry. Shares are up 2.8% year to date as of the close of trading on Thursday.
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