The Kforce Inc. (NYSE:KFRC) Second-Quarter Results Are Out And Analysts Have Published New Forecasts

It's been a good week for Kforce Inc. (NYSE:KFRC) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.3% to US$70.22. Kforce reported US$356m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.75 beat expectations, being 2.9% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Kforce

Taking into account the latest results, Kforce's five analysts currently expect revenues in 2024 to be US$1.42b, approximately in line with the last 12 months. Per-share earnings are expected to increase 5.2% to US$2.89. In the lead-up to this report, the analysts had been modelling revenues of US$1.43b and earnings per share (EPS) of US$2.99 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$68.75, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Kforce analyst has a price target of US$71.00 per share, while the most pessimistic values it at US$66.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kforce is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 3.6% annualised decline to the end of 2024. That is a notable change from historical growth of 3.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.2% annually for the foreseeable future. It's pretty clear that Kforce's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kforce. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kforce's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$68.75, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Kforce going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Kforce you should know about.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com