NEW YORK ( TheStreet) -- Kforce (Nasdaq: KFRC) 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, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KFORCE INC has improved earnings per share by 37.5% 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 two years. We feel that this trend should continue. During the past fiscal year, KFORCE INC increased its bottom line by earning $0.52 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus $0.52).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Professional Services industry average. The net income increased by 31.1% when compared to the same quarter one year prior, rising from $6.44 million to $8.45 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Professional Services industry and the overall market on the basis of return on equity, KFORCE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.