Stock to Target: Kforce Inc. (NASDAQ: KFRC)

Shares of Kforce Inc. (NASDAQ: KFRC) closed the trading at a price of $35.80 with the positive change of +0.99 percent. In the past session approximately 65,175 shares were exchanged against the average daily trading volume of 223,223 shares. The stock touched to the maximum level of $35.95, and it reached the lower level of $35.35 in past session. The stock’s market capitalization has now valued at $883.114 million. The stock’s low price in its 52 week is $16.75 per share while $36.75 as the 52 week high price.

Kforce Inc. (KFRC) recently stated results for its 1st quarter of 2018. Revenues for the quarter ended March 31, 2018 were $346.3M contrast to $334.0M for the quarter ended March 31, 2017, and raise of 3.7 percent. Net income for the quarter ended March 31, 2018 was $9.2M, or $0.37 per share, as contrast to $5.9M, or $0.23 per share, for the quarter ended March 31, 2017.

David L. Dunkel, Chairman and CEO, commented, “We are very happy with our first quarter results as our year-over-year growth rates in our largest business, Tech Flex, meaningfully accelerated to 6.7 percent from 5.4 percent in the fourth quarter of 2017. As we head into Q2 2018, we are experiencing continued strength in our Tech Flex business as companies continue to invest in technology to more effectively and efficiently meet the needs of their consumers. Clients are continuing to look to a flexible human capital model to meet this demand, particularly given the project-based nature of technology. We continue to have success in improving our operating leverage as operating margins raised 80 basis points year-over-year. In addition, our guidance for the second quarter indicates our expectation of attaining our operating margin target of 6.3 percent when quarterly revenues reach $350M. As stated before, we expect to make continued incremental improvements in meeting our next milestone of 7.5 percent in a quarter, without seasonality impacts, where revenues reach $400M. I want to thank all of our clients, consultants and core employees for making our mutual success possible.”

Joseph J. Liberatore, President, stated, “We experienced solid acceleration in key activity levels within Tech Flex in the first quarter primarily as a result of the actions taken over the last couple of years to optimize the alignment of our revenue-generating associates, enhance the sectionation of our client portfolio and improve the productivity of our associates. The growth we are experiencing in Tech Flex is broad-based and we expect to further accelerate revenue growth and improve associate productivity.”

Mr. Liberatore noted additional operational results for the first quarter include:

  • Flex revenues of $332.8M in 1st QUARTER 2018 raised 4.2 percent, from $319.3M in 1st QUARTER 2017.
  • Quarterly year-over-year growth in Flex revenues for Tech and GS was 6.7 percent and 24.5 percent, respectively, while FA experienced a decrease of 7.9 percent.

David M. Kelly, Chief Financial Officer, stated, “Our Flex gross profit margins in Tech and FA improved 30 basis points on a year-over-year basis in the 1st quarter, which we believe is reflective of our focus, discipline and improved training about pricing as well as changes in the mix of our business. We also continue to demonstrate solid progress in improving operating margins through leverage gained from our revenue growth and improving productivity as well as appropriately controlling our SG&A expenses.”

Mr. Kelly continued, “During the first quarter, we repurchased 318 thousand shares, or about $8.7M. We are also happy to announce that our Board of Directors reported a 2nd quarter cash dividend on Kforce ordinary stock of $0.12 per share. The cash dividend will be payable on June 22, 2018 to shareholders of record as of the close of business on June 8, 2018.”

Looking forward to the 2nd quarter of 2018, there will be 64 billing days, which is the same as the 2nd quarter of 2017 and 1st quarter of 2018. Current estimates for the 2nd quarter of 2018 are:

  • Revenue of $355M to $360M
  • Earnings per share of $0.62 to $0.65
  • Gross profit margin of 30.0 percent to 30.2 percent
  • Flex gross profit margin of 27.0 percent to 27.2 percent
  • SG&A expense as a percent of revenue of 23.0 percent to 23.2 percent
  • Operating margin of 6.3 percent to 6.5 percent
  • Effective tax rate of 26.0 percent

A look on the firm performance, its monthly performance is 3.02 percent and a quarterly performance of 30.18 percent. The stock price is moving up from its 20 days moving average with 1.72 percent and isolated positively from 50 days moving average with 6.31 percent.


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