Earnings Miss: Robert Half Inc. Missed EPS By 6.9% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Robert Half Inc. (NYSE:RHI) filed its quarterly result this time last week. The early response was not positive, with shares down 5.5% to US$62.31 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$1.5b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.9% to hit US$0.66 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Robert Half

Following the recent earnings report, the consensus from eleven analysts covering Robert Half is for revenues of US$5.79b in 2024. This implies a perceptible 3.2% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 17% to US$2.54 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.00b and earnings per share (EPS) of US$2.96 in 2024. 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 8.2% to US$64.82. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Robert Half at US$85.00 per share, while the most bearish prices it at US$50.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 6.3% annualised decline to the end of 2024. That is a notable change from historical growth of 3.7% 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 5.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Robert Half 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Robert Half's future valuation.

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. At Simply Wall St, we have a full range of analyst estimates for Robert Half going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Robert Half has 1 warning sign we think you should be aware of.

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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