| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 40.57 | 276 |
| Intrinsic value (DCF) | 5.30 | -51 |
| Graham-Dodd Method | 21.52 | 99 |
| Graham Formula | 0.03 | -100 |
Kelly Services, Inc. (NASDAQ: KELYA) is a leading global workforce solutions provider, offering staffing, consulting, and outsourcing services across diverse industries. Founded in 1946 and headquartered in Troy, Michigan, Kelly Services operates through five key segments: Professional & Industrial, Science, Engineering & Technology, Education, Outsourcing & Consulting, and International. The company serves clients in the U.S., Canada, Europe, and the Asia-Pacific region, delivering specialized talent solutions in office staffing, IT, engineering, education, and RPO (Recruitment Process Outsourcing). With a market cap of approximately $414 million, Kelly Services plays a critical role in the $600+ billion global staffing industry, helping businesses adapt to evolving labor demands. Despite recent net income challenges, the company maintains a strong operational footprint and a diversified service portfolio, positioning it as a resilient player in the Industrials sector.
Kelly Services presents a mixed investment profile. The company operates in a cyclical industry with exposure to macroeconomic labor trends, reflected in its recent negative net income (-$600K in FY 2023) and diluted EPS (-$0.02). However, its diversified service segments and global reach (43% revenue from international markets) provide stability. The stock’s low beta (0.956) suggests lower volatility than the broader market, while its dividend yield (~2.3% based on a $0.30/share payout) offers income appeal. Risks include margin pressures from wage inflation and competition in commoditized staffing segments, but opportunities exist in high-growth areas like RPO and STEM staffing. Investors should monitor the company’s ability to improve profitability through its consulting/outsourcing mix.
Kelly Services competes in a fragmented staffing industry where scale and specialization are critical. Its primary competitive advantage lies in its diversified service portfolio—unlike pure-play staffing firms, Kelly combines traditional temp staffing (Professional & Industrial) with higher-margin services like RPO and talent advisory (Outsourcing & Consulting). The Science, Engineering & Technology segment aligns with growing demand for STEM talent, though it faces intense competition from tech-focused rivals like ASGN. Geographically, Kelly’s European presence (via subsidiaries in France, Germany, etc.) provides diversification but exposes it to regional economic headwinds. The company’s 77-year legacy and Fortune 500 client base bolster its reputation, but its smaller scale vs. giants like Randstad limits pricing power. Kelly’s shift toward outcome-based solutions (e.g., managed services) differentiates it from transactional staffing peers, but execution risks remain in integrating these offerings. Its balance sheet is manageable (debt-to-equity ~0.4x), but liquidity ($39M cash) is modest for M&A to accelerate growth.