Earnings Beat: Kforce Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Kforce Inc. (NYSE:KFRC) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.4% to US$55.85. Kforce reported US$353m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.75 beat expectations, being 9.2% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Kforce

Following last week's earnings report, Kforce's five analysts are forecasting 2025 revenues to be US$1.42b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 7.3% to US$2.79 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.47b and earnings per share (EPS) of US$3.39 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.4% to US$63.00. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Kforce, with the most bullish analyst valuing it at US$71.00 and the most bearish at US$58.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.6% by the end of 2025. This indicates a significant reduction from annual growth of 3.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kforce is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Kforce going out to 2026, and you can see them free on our platform here.

You can also see whether Kforce is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.