Is Kforce overvalued?
 | By Rifka Kats | Macroaxis Story |
Kforce Inc has a Beta of 2.19, indicating it carries higher-than-average market risk. This means the stock tends to outperform when the market rises but may lag during downturns. Currently, the expected return stands at -0.42%, suggesting a potential decline. Before making any decisions, it's wise to review Kforce’s potential upside and examine the relationship between its daily balance of power and the market facilitation index. These indicators can offer clues about whether recent trends might repeat soon. Keep in mind, higher beta stocks like Kforce can offer substantial gains in bullish markets but also pose greater risks during downturns. Always consider these factors alongside your investment goals and risk tolerance.
Important Points
Kforce Inc. stock currently trades around $25.3, with a potential upside of 3.13%, but its modest profit margin of 3.22% and an information ratio of -0.23 suggest limited momentum. While the company's market cap stands at $470.6 million and revenue hits $1.4 billion, investors should weigh these figures against its relatively low skewness of 0.55 and a mean deviation of 1.89 to assess whether the stock is fairly valued or overhyped.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
Understanding whether Kforce Inc. stock is fairly valued or overhyped requires a close look at its recent performance and future prospects. As a player in the Professional Services sector within Staffing & Employment Services, Kforce has seen some challenges, with quarterly earnings growth dipping by 0.21 and revenue shrinking slightly by 0.06. Despite these headwinds, the company maintains a solid gross profit of around $370 million and an operating margin of approximately 4.45%. Analysts currently estimate the next year's EPS at about 2.27, with a target price range between $38.22 and $46.62, suggesting potential upside. However, the stock's current median price hovers near $25.01, and with a possible downside around $22.44, investors should weigh whether the valuation reflects genuine growth or if the stock is getting ahead of itself. Currently, Kforce's enterprise value appears poised for notable growth based on recent financial trends. The stock’s Price-to-Sales ratio is expected to rise to 0.88, while the dividend yield is projected to dip to 0.02. Despite some concerns among baby boomers about the professional services sector, Kforce remains worth a closer look. I plan to analyze the latest investor sentiment and key factors influencing the company’s performance. This review will highlight critical variables affecting Kforce’s offerings and how they could shape the outlook for active traders throughout the year.The performance of Kforce Inc in the marketplace will significantly impact your decision to invest in its stock. Revenue growth, profitability, competitive positioning, management quality, and industry trends can influence Kforce's stock prices. When investing in Kforce, there are several factors to consider and potential outcomes to expect. As a company performs well, its stock price may increase, allowing investors to benefit from price appreciation. However, Kforce Stock can experience significant price fluctuations due to market conditions, economic factors, industry trends, or company-specific news. This is why investing in stocks such as Kforce carries risks, including the potential for capital loss. Stock prices can decline, and investors may incur losses if they sell shares at a lower price than their initial investment.
And What about dividends?
A dividend is the distribution of a portion of Kforce earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Kforce dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Kforce one year expected dividend income is about USD0.89 per share.
At present, Kforce's Dividend Paid And Capex Coverage Ratio is projected to increase slightly based on the last few years of reporting. | Last Reported | Projected for Next Year | ||
| Dividends Paid | -28.2 M | -26.8 M | |
| Dividend Yield | 0.03 | 0.02 | |
| Dividend Payout Ratio | 0.56 | 0.59 | |
| Dividend Paid And Capex Coverage Ratio | 2.43 | 4.58 |
Investing in dividend-paying stocks, such as Kforce Inc is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Kforce must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Kforce. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.How important is Kforce's Liquidity
Kforce financial leverage refers to using borrowed capital as a funding source to finance Kforce Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Kforce financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Kforce's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Kforce's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Kforce's total debt and its cash.
What do experts say about Kforce?
Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
Analysis ConsensusA Deeper Perspective
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Kforce has an asset utilization ratio of 392.73 percent. This indicates that the Company is making $3.93 for each dollar of assets. An increasing asset utilization means that Kforce Inc is more efficient with each dollar of assets it utilizes for everyday operations.A penny saved is a penny earned, and when evaluating Kforce Inc., it’s clear the company’s valuation warrants a closer look. With a PE ratio of around 10.63 and a PEG ratio of 0.43, the stock appears attractively priced relative to its growth prospects, especially given its current EPS estimate of 2.06 for the year. However, the company’s operating margin is very slim at 0.04%, and quarterly earnings have declined slightly by 0.21%, suggesting some underlying challenges. Despite a market cap of approximately $470.55 million and high institutional ownership at 93.5%, the stock’s risk-adjusted performance is slightly negative at -0.19, and its maximum drawdown has been around 10.69%. Investors should weigh these factors carefully, considering whether the current valuation reflects genuine growth potential or if it’s overhyped given the modest profit margins and recent earnings trends..
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