NEW YORK ( TheStreet) -- Kforce (Nasdaq: KFRC) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 13.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 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 $0.66 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus $0.66).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Professional Services industry average. The net income has decreased by 15.8% when compared to the same quarter one year ago, dropping from $4.84 million to $4.08 million.
- The gross profit margin for KFORCE INC is currently lower than what is desirable, coming in at 30.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.50% trails that of the industry average.
- The share price of KFORCE INC has not done very well: it is down 9.78% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
-- Written by a member of TheStreet Ratings Staff