Kforce Inc. (KFRC) | Investment Case

1. Company Snapshot

1.a. Company Description

Kforce Inc.provides professional staffing services and solutions in the United States.It operates through two segments, Technology, and Finance and Accounting (FA).

The Technology segment provides talent solutions to its clients primarily in the areas of information technology, such as systems/applications architecture and development, data management and analytics, business and artificial intelligence, machine learning, project and program management, and network architecture and security.This segment serves clients in various industries comprising financial and business services, communications, insurance, retail, and technology industries.The FA businesses segment offers talent solutions to its clients in areas, including financial planning and analysis, business intelligence analysis, accounting, transactional accounting, business and cost analysis, and taxation and treasury.

It also provides consultants in lower skilled areas comprising loan servicing and support, customer and call center support, data entry, and other administrative roles.This segment serves clients in various industries, including financial and business services, healthcare, and manufacturing sectors.Kforce Inc.

was founded in 1962 and is headquartered in Tampa, Florida.

Show Full description

1.b. Last Insights on KFRC

Kforce Inc.'s recent performance was negatively impacted by declining earnings over the past three years, attributed to a slowing job market. The company's Q4 2025 earnings missed estimates, with quarterly earnings of $0.43 per share, below the $0.47 per share consensus. Investor sentiment was also dampened by institutional investors, such as Copeland Capital Management LLC and Teacher Retirement System of Texas, reducing their stakes in the company. Additionally, Kforce's Q4 2025 revenue was reported at $332.0 million. (Source: Zacks, Business Wire)

1.c. Company Highlights

Last Price	26.38
Change Percentage	0.46%
Open	26.43
Previous Close	26.26
Market Cap ( Millions)	482
Volume	296917
Year High	50.14
Year Low	24.49
M A 50	30.53
M A 200	32.7

FCF Yield	9.71%
Dividend Yield	5.95%
ROE	26.32%
Debt / Equity	55.97%
Net Debt / EBIDTA	124.98%
Price To Book	3.69
Price Earnings Ratio	13.19
Price To FCF	10.3
Price To sales	0.36
EV / EBITDA	10.16

2. Kforce's Q4 2025 Earnings: A Strong Finish to a Challenging Year

Kforce reported Q4 2025 revenues of $332 million, a 3% sequential improvement driven by strong performances in technology and financial and accounting (F&A) businesses. The company's Flex revenues in technology and F&A grew 35.7% and 5.7%, respectively, on a billing day basis. For fiscal 2025, Kforce reported a GAAP earnings per share of $1.96, a 5% year-over-year decrease, while adjusted earnings per share was $2.09, a 22% decline. Gross margins expanded 20 basis points year over year, with Flex margins in the technology business increasing 40 basis points.

Publication Date: Mar -08

                                    📋 Highlights
                                    Q4 2025 Revenue Growth::
                                                Revenues rose to $332M, a 3% sequential increase, driven by 35.7% Flex revenue growth in technology and 5.7% in F&A.
Earnings Decline::
                                                GAAP EPS fell 5% to $1.96 YoY, while adjusted EPS dropped 22% to $2.09, reflecting operational and tax pressures.
Gross Margin Expansion::
                                                Year-over-year gross margins improved 20 bps, with tech Flex margins rising 40 bps due to mix and pricing discipline.
Capital Returns::
                                                $14.1M returned to shareholders via dividends and buybacks, with a 7th consecutive annual dividend increase.

                                

Revenue Growth Drivers

The management team attributes the recent revenue growth to a combination of traditional staff augmentation and increased demand for consulting services, particularly in areas like data and digital practices. Clients are moving forward with critical initiatives, not just AI-focused projects, but also traditional technology investments. The American Staffing Association Index turning positive in August 2025 is cited as a sign of improvement in temporary and contract employment.

Operational Efficiency and Margin Expansion

Kforce has seen stability in bill rates and some slight improvements in spread, driven by a mix dynamic and disciplined conversations with clients. The company expects stability in spreads moving into the first quarter, with potential for continued mix benefit as they move through 2026. The recent cost-reduction actions are expected to yield an annualized benefit of approximately $7 million, or $0.30 per share, and drive operating margin expansion.

Outlook and Guidance

Kforce expects Q1 2026 revenues to be in the range of $324 million to $332 million and earnings per share to be between $0.37 and $0.45. The company is optimistic about its recent operating trends and expects to continue delivering exceptional results. Analysts estimate next year's revenue growth at 4.3%. The actual EPS for Q4 came out at $0.43, relative to estimates at $0.47.

Valuation and Dividend Yield

With a P/E Ratio of 13.67 and a Dividend Yield of 5.74%, Kforce's valuation appears reasonable. The company's ROE of 26.32% and ROIC of 14.55% indicate strong profitability. The Net Debt / EBITDA ratio of 1.25 suggests a manageable debt burden. Kforce's commitment to returning capital to shareholders is evident in the increased dividend, marking the seventh consecutive year of increases.

3. NewsRoom

Kforce (KFRC) Upgraded to Buy: Here's What You Should Know

Feb -04

Source: zacks.com

Can Kforce (KFRC) Climb 27.92% to Reach the Level Wall Street Analysts Expect?

Feb -04

Source: zacks.com

Kforce Inc. $KFRC Shares Sold by Teacher Retirement System of Texas

Feb -03

Source: defenseworld.net

Kforce Inc. (KFRC) Q4 2025 Earnings Call Transcript

Feb -03

Source: seekingalpha.com

Kforce (KFRC) Lags Q4 Earnings Estimates

Feb -02

Source: zacks.com

Kforce Reports Fourth Quarter 2025 Revenue of $332.0 Million

Feb -02

Source: businesswire.com

Here Are 3 Staffing Stocks to Consider Despite Industry Challenges

Jan -20

Source: zacks.com

Kforce Inc. to Announce Fourth Quarter Results on February 2, 2026

Jan -06

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.81%)

6. Segments

Technology

Expected Growth: 4%

Kforce Inc.'s Technology segment growth is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. The rise of remote work and e-commerce has accelerated the need for skilled IT professionals, contributing to the segment's 4% growth. Additionally, the company's strategic acquisitions and investments in emerging technologies have expanded its service offerings, further fueling growth.

Finance and Accounting

Expected Growth: 2%

Kforce Inc.'s Finance and Accounting segment growth is driven by increasing demand for specialized financial expertise, particularly in areas such as financial planning and analysis, accounting operations, and risk management. Additionally, the need for companies to optimize financial processes and improve compliance with regulatory requirements also contributes to this growth.

7. Detailed Products

Technology Services

Kforce provides technology services including IT staffing, project management, and technology consulting to help clients achieve their business goals.

Finance and Accounting Services

Kforce offers finance and accounting services including financial analysis, accounting operations, and financial planning to help clients manage their financial resources.

Government Solutions

Kforce provides government solutions including IT services, consulting, and staffing to help government agencies achieve their mission objectives.

8. Kforce Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Kforce Inc. operates in a niche market, providing professional staffing services, which reduces the threat of substitutes. However, the rise of online platforms and automation may pose a moderate threat to the company's services.

Bargaining Power Of Customers

Kforce Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's specialized services and long-term contracts further reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Kforce Inc. has a large pool of temporary and contract workers, which reduces the bargaining power of suppliers. The company's scale and reputation also give it negotiating power over suppliers.

Threat Of New Entrants

While there are barriers to entry in the staffing industry, such as licensing and regulatory requirements, new entrants can still pose a threat to Kforce Inc. The company's established brand and reputation, however, provide a competitive advantage.

Intensity Of Rivalry

The staffing industry is highly competitive, with many established players competing for market share. Kforce Inc. must differentiate itself through its specialized services and strong customer relationships to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	22.12%
Debt Cost	3.95%
Equity Weight	77.88%
Equity Cost	8.40%
WACC	7.41%
Leverage	28.41%

11. Quality Control: Kforce Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Heidrick & Struggles

A-Score: 5.4/10

Value: 5.3

Growth: 4.1

Quality: 5.5

Yield: 3.0

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

Barrett Business Services

A-Score: 4.9/10

Value: 4.7

Growth: 5.6

Quality: 6.2

Yield: 2.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

Kforce

A-Score: 4.6/10

Value: 6.4

Growth: 4.4

Quality: 6.6

Yield: 6.0

Momentum: 0.0

Volatility: 4.3

1-Year Total Return ->

BGSF

A-Score: 4.5/10

Value: 8.0

Growth: 3.3

Quality: 3.1

Yield: 8.0

Momentum: 3.0

Volatility: 1.3

1-Year Total Return ->

HireRight

A-Score: 4.3/10

Value: 6.5

Growth: 7.1

Quality: 3.4

Yield: 0.0

Momentum: 6.0

Volatility: 2.7

1-Year Total Return ->

Kelly Services

A-Score: 4.2/10

Value: 9.0

Growth: 2.0

Quality: 4.1

Yield: 4.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-4.05%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.41%

Kforce Inc. - US4937321010

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KFRC

1.c. Company Highlights

Average Quality

Average Yield

Medium Volatility

Better Quality

Earnings Beats

Higher Growth

Higher Yield

Revenues Beats

Weak Momentum

Less Volatile

Earnings Miss

Revenues Miss

Stable Momentum

2. Kforce's Q4 2025 Earnings: A Strong Finish to a Challenging Year

Revenue Growth Drivers

Operational Efficiency and Margin Expansion

Outlook and Guidance

Valuation and Dividend Yield

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.81%)

6. Segments

Technology

Expected Growth: 4%

Finance and Accounting

Expected Growth: 2%

7. Detailed Products

Technology Services

Finance and Accounting Services

Government Solutions

8. Kforce Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Kforce Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.38$

Current Price

26.38$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA