Kelly Services (KELYA) Stock Forecast & Price Target

Kelly Services Inc has demonstrated a strong revenue growth trajectory, particularly within its high-margin outcome-based solutions, which have become a significant contributor in recent years. The Education segment has shown remarkable expansion, rising from $450 million in revenue in 2019 to an anticipated annual run-rate exceeding $1 billion in 2025, bolstered by the recent MRP acquisition in 2024. Additionally, the continued growth of payroll process outsourcing within Talent Solutions indicates that as economic conditions improve, companies are likely to leverage Kelly Services' offerings to enhance their staffing capabilities efficiently.

Kelly Services Inc. reported a 14% year-over-year decline in adjusted EPS for Q3/25, falling significantly short of both internal estimates and consensus expectations. Revenue from the company's Enterprise Talent Management (ETM) segment, which constitutes 52% of total revenues, decreased by 13.1% year-over-year, contributing to a broader decline of 2% year-over-year across all segments, below anticipated growth rates. Additionally, the forecast for an adjusted EBITDA margin contraction of 70 basis points in Q4/25, combined with a 37% drop in adjusted EBITDA for Q3/25, further underscores the company’s financial challenges and negative outlook.