Kelly Services (KELYA) Stock Forecast & Price Target

Kelly Services Inc. has demonstrated significant revenue growth in its higher-margin outcome-based solutions, positively impacting its overall financial performance. The Education segment has shown remarkable expansion, with revenues rising from $450 million in 2019 to an annual run-rate exceeding $1 billion in 2025, highlighting its strong position in the K-12 substitute teacher staffing market. Additionally, the ongoing growth in Payroll Process Outsourcing (PPO) reflects the company's ability to adapt to changing economic conditions, allowing businesses to efficiently manage staffing needs while minimizing associated costs.

Kelly Services Inc. reported a significant decline in key performance metrics for Q3/25, with adjusted EPS falling 14% year-over-year to $0.18, significantly underperforming both the internal estimate and consensus expectations. The company experienced a 2% year-over-year revenue decline, which was below its prior guidance of anticipated growth, while adjusted EBITDA dropped 37% year-over-year, reflecting challenges across its primary segments. Additionally, the ongoing contraction in the Enterprise Talent Management segment, which accounts for 52% of total revenue, and the anticipated decline in adjusted EBITDA margin point to persistent inefficiencies and a weakening demand for its services.