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Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Professional & Industrial segment delivers staffing, outcome-based, and placement services in the areas of office, professional, light industrial, and contact center specialties. The Science, Engineering & Technology segment offers staffing, outcome-based, and placement services in the areas of science and clinical research, engineering, technology, and telecommunications specialties. The Education segment provides staffing, placement, and executive search services to early childhood, and higher education markets. The Outsourcing & Consulting segment offers recruitment process outsourcing (RPO), payroll process outsourcing, and talent advisory services, as well as managed services. The International segment provides staffing, RPO, and placement services in Europe and Mexico. The company serves customers in the United States, Canada, Mexico, Puerto Rico, France, Switzerland, Portugal, Russia, the United Kingdom, Italy, rest of Europe, and the Asia-Pacific region. Kelly Services, Inc. was founded in 1946 and is headquartered in Troy, Michigan.
Discounted Cash Flow Valuation of Kelly Services Inc
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $50.1M | $54.04M | $58.12M | $62.33M | $66.63M | $71.03M | $75.49M | $79.98M | $84.49M | $88.98M | $93.43M | $934.3M |
DCF | $46.99M | $43.95M | $40.98M | $38.1M | $35.31M | $32.63M | $30.07M | $27.62M | $25.29M | $23.1M | $231M | |
Value | $575M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 01-2016 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 01-2021 | 01-2022 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 0.97% | 2.3% | 1.3% | 0.42% | 2.1% | -1.6% | 3.2% | -1.3% | 0.74% | 1.1% |
ROA | 3.5% | 7.6% | 3.5% | 3.8% | 4.9% | -3.7% | 6.5% | 0.56% | 1.1% | 1.9% |
ROE | 6% | 12% | 6.2% | 2% | 8.9% | -6% | 12% | -5% | 2.8% | 3.9% |
The average Net Margin over the past 5 years is +0.59%.
The trend of Net Margin over the past 5 years is -0.11%.
The average ROA over the past 5 years is +2.19%.
The trend of ROA over the past 5 years is -0.46%.
The average ROE over the past 5 years is +2.39%.
The trend of ROE over the past 5 years is -0.56%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 01-2016 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 01-2021 | 01-2022 | 12-2022 | 12-2023 | TTM |
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Debt FCF | 8.41 | 0.00 | 0.22 | 0.06 | 0.02 | 0.00 | 0.00 | -0.01 | 0.00 | - |
Debt Equity | 0.06 | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | - |
MIN | ||||||||||
Graham Stability | - | - | 100% | 28% | 100% | -100% | 100% | -96% | 100% | -100% |
The Debt/FCF trailing twelve month is -.
The trend of Debt/FCF over the past 5 years is -0.01.
Graham’s Stability measure stands at -1.04.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 01-2021 | 12-2022 | Trend |
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Revenue | -1.2% | -2.6% | 2.3% | -2.6% | 0.079% |
Net Income | -16% | 9.3% | - | - | 34% |
Stockholders Equity | 3.1% | 1.6% | 1.4% | -0.04% | -1.6% |
FCF | 14% | 11% | -29% | - | -41% |
The Revenue CAGR over the past 5 years is -2.59%.
The trend of Revenue growth rate over the past 5 years is +0.08%.
The Earnings CAGR over the past 5 years is +9.29%.
The trend of Earnings growth rate over the past 5 years is +33.51%.
The Equity CAGR over the past 5 years is +1.57%.
The trend of Equity growth rate over the past 5 years is -1.64%.
The FCF CAGR over the past 5 years is +11.39%.
The trend of FCF growth rate over the past 5 years is -41.31%.