Why Robert Half International (RHI) Stock Hit a Lifetime High Today

NEW YORK (TheStreet) -- Robert Half International (RHI) gained 8.1% to a new lifetime high of $53.08 Wednesday after beating analysts' estimates for earnings in the second quarter.

For the second quarter Robert Half reported earnings of 55 cents a share, beating the Capital IQ Consensus Estimate of 52 cents a share by 3 cents. Revenue grew 10.4% to $1.17 billion for the quarter. Analysts expected revenue of $1.14 billion for the quarter.

Looking forward to the third quarter, Robert Half expects earnings of 55 cents to 60 cents a share, while analysts' estimates of 56 cents a share. The company expects third-quarter revenue of $1.18 billion to $1.23 billion, above analysts' expectations of $1.17 billion.

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TheStreet Ratings team rates ROBERT HALF INTL INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROBERT HALF INTL INC (RHI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 5.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RHI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RHI has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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, ROBERT HALF INTL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.29% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RHI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ROBERT HALF INTL INC has improved earnings per share by 12.5% 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, ROBERT HALF INTL INC increased its bottom line by earning $1.83 versus $1.49 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus $1.83)
  • You can view the full analysis from the report here: RHI Ratings Report

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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.

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