Rating Change #5

Robert Half International ( RHI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • ROBERT HALF INTL 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ROBERT HALF INTL INC increased its bottom line by earning $0.44 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.44).
  • 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 199.0% when compared to the same quarter one year prior, rising from $12.18 million to $36.43 million.
  • 41.10% is the gross profit margin for ROBERT HALF INTL INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.90% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Professional Services industry and the overall market on the basis of return on equity, ROBERT HALF INTL INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • RHI has underperformed the S&P 500 Index, declining 18.89% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

Robert Half International Inc. provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. Its Accountemps division offers temporary staffing in the fields of accounting, tax, and finance. The company has a P/E ratio of 28.3, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Robert Half International has a market cap of $3 billion and is part of the services sector and diversified services industry. Shares are down 34.4% year to date as of the close of trading on Friday.

You can view the full Robert Half International Ratings Report or get investment ideas from our investment research center.

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