What Happened?
Shares of professional staffing firm Kforce (NYSE: KFRC) jumped 5.8% in the morning session after its peer in the workforce solutions industry, ManpowerGroup, reported strong second-quarter financial results, suggesting a healthier market for staffing companies.
ManpowerGroup announced that its second-quarter revenue grew approximately 8% from the previous year to $4.9 billion, which was better than analysts expected. The company also reported a significant profit of $1.13 per share, a sharp turnaround from a net loss of $1.44 per share in the same period a year earlier.
ManpowerGroup's CEO, Jonas Prising, credited the performance to "good execution across our brands and markets, continued cost discipline and improving demand." The positive report from a major industry player is likely boosting investor confidence in the broader staffing sector, including Kforce.
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What Is The Market Telling Us
Kforce’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 30.9% on the news that the company reported third-quarter earnings that surpassed analyst expectations and provided an optimistic forecast for the fourth quarter.
Kforce announced revenue of $332.6 million and earnings of $0.63 per share. Although sales decreased by 5.9% year on year, both figures comfortably beat market forecasts.
Adding to the positive sentiment, the company's revenue guidance for the upcoming fourth quarter was approximately $330 million, about 3% higher than analysts had projected. This better-than-expected performance and strong outlook suggested to investors that demand might be stabilizing, despite the recent period of decline.
Kforce is up 87.8% since the beginning of the year, and at $58.84 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of Kforce’s shares 5 years ago would now be looking at only $978.73.
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