George Tong, an analyst from Goldman Sachs, reiterated the Sell rating on Robert Half (RHI – Research Report). The associated price target is $64.00.
George Tong’s Sell rating on Robert Half’s stock (RHI) is based on several factors. Tong points out that Robert Half’s 3rd quarter results reveal a growing reluctance among clients to engage in permanent and contract staff hiring due to an uncertain macroeconomic environment. This has led to an increasing rate of year-on-year revenue decline compared to the previous quarter. Furthermore, the revenue year-on-year declines in September and October have worsened from the 3rd quarter overall, and the guidance indicates further deterioration in the rate of revenue decline in the 4th quarter.
While there has been a slight decrease in weekly sequential rates of revenue decline at Robert Half over the past quarter, they have yet to fully stabilize. This is attributed to the low churn among permanent hires, reduced demand for contract staff, and elongated sales cycles. These factors are expected to put pressure on Robert Half’s revenue performance and extend the cycle of negative consensus revenue estimate revisions. Additionally, there is a significant operating margin contraction due to negative fixed cost leverage as the company seeks to preserve sales and recruiter capacity.
In another report released today, Bank of America Securities also reiterated a Sell rating on the stock with a $59.00 price target.
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Robert Half (RHI) Company Description:
Robert Half International, Inc. engages in the provision of staffing and risk consulting services. It operates through the following segments: Temporary and Consultant Staffing, Permanent Placement Staffing and Risk Consulting & Internal Audit Services. The Temporary and Consultant Staffing segment offers staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing, and web design fields. The Permanent Placement Staffing segment provides full-time personnel in the accounting, finance, administrative & office and information technology fields. The Risk Consulting and Internal Audit Services segment comprises business and technology risk consulting and internal audit services. The company was founded by Robert Half in 1948 and is headquartered in Menlo Park, CA.
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