Robert Half upped to strong buy on rising staffing demand
The staffing firm is expected to post a solid performance in the soon to be reported quarter as it has been consistently seeing an increase in staffing demand.
Why the Upgrade?
Robert Half has been witnessing broad-based and increasing demand for its professional staffing services, particularly in the U.S., which has been driving revenues since the past many quarters. Robert Half’s earnings have also grown in double digits for 18 consecutive quarters on a year-over-year basis. Robert Half has also delivered positive surprises in the last four quarters with an average surprise of 4.23% based on continued staffing demand.
The company’s international operations have also been improving since the first quarter of 2014, driven by permanent placement services. With the current improvement in the labor market, the company expects to generate accelerated global revenues in the near term.
Robert Half also expects demand from small and mid-sized businesses, one its key markets to increase in the near term. In addition, the company expects a rising need for skilled finance and information technology talent in the regulatory and compliance space. Also, U.S. health care reform and consumer protection regulations are fueling demand for the company’s services.
The rising staffing needs of the company’s clients and a gradual improvement in economic conditions and job markets in the U.S. led to a rise in the demand for temporary workers as a percentage of total U.S. employment.
Robert Half’s subsidiary Protiviti is also one of the key drivers of revenues and operating performance. It helps companies solve problems in finance, technology, operations, governance, risk and internal audit. The company expects the momentum to continue in the upcoming quarters with an improving economic picture.
Other stocks in the staffing industry worth considering include Resources Connection Inc. (RECN - Snapshot Report), Cross Country Healthcare, Inc. (CCRN -Snapshot Report) and On Assignment Inc. (ASGN - Snapshot Report). While Resources Connection sports a Zacks Rank #1, Cross Country and On Assignment hold a Zacks Rank #2 (Buy).