Kelly Services (NASDAQ:KELYA) Stock

Kelly Services

Kelly Services Inc is a provider of workforce solutions and consulting, and staffing services. The company's operations are divided into four business segments, namely Professional & Industrial, Science, Education, Outsourcing & Consulting Group, and International. Other than OCG, each segment delivers talent through staffing services, permanent placement, or outcome-based services. OCG segment delivers talent solutions, including managed service providers, payroll process outsourcing, recruitment process outsourcing, and talent advisory services. International also delivers RPO talent solutions within its local markets. The majority of revenue is derived from Professional & Industrial.

Kelly Services, Inc. - Class A Common Stock

Kelly Services Inc

News

KELYA

Kelly Launches Integrated Permanent Hiring Solutions Business, Combining KellyOCG And Motion Recruitment Partners' Brands

Barrington Research analyst Kevin Steinke maintains Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) with a Outperform and maintains $25 price target.

Price Target

Analyst Ratings

Barrington Research Maintains Outperform on Kelly Services, Maintains $25 Price Target

WIIM

Kelly Services shares are trading higher after the company reported better-than-expected Q4 financial results.

Guidance

Kelly Sees 1H Revenue Growth Of 10%

Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) reported quarterly adjusted earnings of $0.82 per share which beat the analyst consensus estimate of $0.46 by 78.26 percent. This is a 11.83 percent decrease over earnings of $0.93 per share from the same period last year. The company reported quarterly sales of $1.19 billion which beat the analyst consensus estimate of $1.15 billion by 3.63 percent. This is a 3.33 percent decrease over sales of $1.23 billion the same period last year.

Earnings

Earnings Beats

Kelly Services Q4 Adj $0.82 Beats $0.46 Estimate, Sales $1.19B Beat $1.15B Estimate

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Earnings Scheduled For February 13, 2025

The authorization expires on December 2, 2026.

Buybacks

Kelly Board Approves $50M Share Repurchase Program

<ul>
<li>Kelly's acquisition of Children's Therapy Center (CTC) further expands growth opportunities in the high-margin, high-demand therapeutic services segment.</li>
<li>The integration of CTC into Kelly Education's Pediatric Therapy Services will bolster service delivery, offering Minnesota school districts access to comprehensive therapy solutions to address the increasing demand arising from student special education needs.</li>
<li>The addition of CTC brings increased scale to the current network of licensed therapists, enabling flexible practice in clinics or schools. &nbsp;</li>
</ul>
TROY, Mich., Nov. 19, 2024 (GLOBE NEWSWIRE) -- Today, <a href="https://www.kellyservices.com/">Kelly</a> (Nasdaq:&nbsp;KELYA, KELYB) announced that it has acquired <a href="https://childrenstherapyctr.com/">Children's Therapy Center (CTC)</a>. Specializing in occupational, physical, and speech therapy for children from birth to eighteen, CTC operates from its headquarters in Eagan, MN, with an additional office in Apple Valley, MN. This acquisition will integrate CTC into <a href="https://www.kellyeducation.com/">Kelly Education</a>'s <a href="https://www.mypts.com/">Pediatric Therapy Services (PTS)</a> portfolio. This provides opportunities for Minnesota school districts, including those who currently partner with <a href="https://www.teachersoncall.com/">Teachers On Call (TOC)</a>, a Kelly Education Company, to integrate PTS's related therapy services to meet the growing demand of student special education needs. The terms of the acquisition were not disclosed.

Kelly Announces That It Has Acquired Children's Therapy Center; The Terms Of The Acquisition Were Not Disclosed

Barrington Research analyst Kevin Steinke maintains Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) with a Outperform and lowers the price target from $29 to $25.

Barrington Research Maintains Outperform on Kelly Services, Lowers Price Target to $25

<h3>Gainers</h3>
<ul>
<li>Nature's Miracle Holding (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NMHI#NASDAQ">NMHI</a>) shares rose 168.3% to $0.26 during Thursday's regular session. The company's market cap stands at $8.2 million. </li>
<li>Wilhelmina International (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WHLM#NASDAQ">WHLM</a>) shares rose 39.84% to $4.6. The company's market cap stands at $23.7 million. </li>
<li>CoreCivic (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CXW#NYSE">CXW</a>) shares increased by 25.71% to $22.1. The market value of their outstanding shares is at $2.4 billion. As per the news, the Q3 earnings report came out yesterday. </li>
<li>Eshallgo (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EHGO#NASDAQ">EHGO</a>) stock rose 25.31% to $3.77. The market value of their outstanding shares is at $81.9 million. </li>
<li>Lyft (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LYFT#NASDAQ">LYFT</a>) stock moved upwards by 23.61% to $17.8. The market value of their outstanding shares is at $7.3 billion. As per the press release, Q3 earnings came out yesterday. </li>
<li>Earlyworks Co (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ELWS#NASDAQ">ELWS</a>) stock increased by 23.15% to $7.5. The company's market cap stands at $22.6 million. </li>
</ul>
<h3>Losers</h3>
<ul>
<li>Exela Technologies (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/XELA#NASDAQ">XELA</a>) shares declined by 39.5% to $1.2 during Thursday's regular session. The company's market cap stands at $7.6 million. </li>
<li>Simpple (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SPPL#NASDAQ">SPPL</a>) shares fell 19.9% to $1.09. The company's market cap stands at $17.6 million. </li>
<li>Pixie Dust Technologies (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PXDT#NASDAQ">PXDT</a>) stock declined by 16.25% to $0.67. The market value of their outstanding shares is at $9.9 million. </li>
<li>Franklin Covey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FC#NYSE">FC</a>) stock declined by 15.75% to $37.15. The market value of their outstanding shares is at $486.4 million. As per the news, the Q4 earnings report came out yesterday. </li>
<li>Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) stock fell 15.67% to $18.77. The market value of their outstanding shares is at $666.5 million. As per the press release, Q3 earnings came out today. </li>
<li>TTEC Holdings (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TTEC#NASDAQ">TTEC</a>) stock fell 14.37% to $4.65. The market value of their outstanding shares is at $221.9 million. As per the press release, Q3 earnings came out yesterday. 
See Also: <a href="http://www.benzinga.com/money/best-industrials-stocks/" title="www.benzinga.com/money/best-industrials-stocks/">www.benzinga.com/money/best-industrials-stocks/</a></li>
</ul>
This article was generated by Benzinga's automated content engine and reviewed by an editor.

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12 Industrials Stocks Moving In Thursday's Intraday Session

Kelly Services shares are trading lower after the company reported worse-than-expected Q3 financial results.

Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) reported quarterly earnings of $0.21 per share which missed the analyst consensus estimate of $0.36 by 41.67 percent. This is a 58 percent decrease over earnings of $0.50 per share from the same period last year. The company reported quarterly sales of $1.04 billion which missed the analyst consensus estimate of $1.07 billion by 3.20 percent. This is a 7.16 percent decrease over sales of $1.12 billion the same period last year.

Earnings Misses

Kelly Services Q3 2024 Adj EPS $0.21 Misses $0.36 Estimate, Sales $1.04B Miss $1.07B Estimate

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Shares of professional service companies are trading higher after Donald Trump won the 2024 presidential election.

A new SEC filing reveals that Nicola Soares, Senior Vice President at Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>), made a notable insider purchase on October 16,.
What Happened: Soares's recent purchase of 9,843 shares of Kelly Services, disclosed in a Form 4 filing with the <a href="https://www.sec.gov/Archives/edgar/data/0000055135/000112760224025630//Archives/edgar/data/55135/000112760224025630/0001127602-24-025630-index.htm">U.S. Securities and Exchange Commission</a> on Wednesday, reflects confidence in the company's potential. The total transaction value is $200,009.
Kelly Services shares are trading down 0.0% at $20.62 at the time of this writing on Thursday morning.
<h3>All You Need to Know About Kelly Services</h3>
Kelly Services Inc is a provider of workforce solutions and consulting and staffing services. The company's operations are divided into five business segments namely Professional &amp; Industrial, Science, Engineering &amp; Technology, Education, Outsourcing &amp; Consulting, and International. Other than OCG, each segment delivers talent through staffing services, permanent placement, or outcome-based services. OCG segment delivers talent solutions including managed service providers, payroll process outsourcing, recruitment process outsourcing, and talent advisory services. International also delivers RPO talent solutions within its local markets. The majority of revenue is derived from Professional &amp; Industrial.
<h3>Kelly Services: Delving into Financials</h3>
Revenue Challenges: Kelly Services's revenue growth over 3 months faced difficulties. As of 30 June, 2024, the company experienced a decline of approximately -13.12%. This indicates a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Industrials sector.
Evaluating Earnings Performance:
<ul>
<li>
Gross Margin: The company shows a low gross margin of 20.21%, suggesting potential challenges in cost control and profitability compared to its peers.
</li>
<li>
Earnings per Share (EPS): Kelly Services's EPS reflects a decline, falling below the industry average with a current EPS of 0.13.
</li>
</ul>
Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.21.
Valuation Metrics: A Closer Look
<ul>
<li>
Price to Earnings (P/E) Ratio: Kelly Services's P/E ratio of 15.62 is below the industry average, suggesting the stock may be undervalued.
</li>
<li>
Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.17, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.
</li>
<li>
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation &amp; Amortization): With a below-average EV/EBITDA ratio of 10.38, Kelly Services presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.
</li>
</ul>
Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.
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<h3>Why Pay Attention to Insider Transactions</h3>
It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.
In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.
Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.
<h3>Understanding Crucial Transaction Codes</h3>
Navigating through the landscape of transactions, <a href="https://www.benzinga.com/money/investing-tools">investors</a> often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
<a href="https://www.benzinga.com/sec/insider-trades/search/index?company_cik=0000055135">Check Out The Full List Of Kelly Services's Insider Trades.</a>
Insider Buying Alert: Profit from C-Suite Moves
Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-checkout/?t=Be8be9arja3be22in8&amp;utm_source=benzinga-insights">Click here for access</a>.
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Insider Trades

Trading Ideas

Kelly Services Senior Vice President Trades $200K In Company Stock

Disclosed in the latest SEC filing, a significant insider purchase on October 16, involves Daniel Malan, Senior Vice President at Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>).
What Happened: Malan's recent purchase of 9,843 shares of Kelly Services, disclosed in a Form 4 filing with the <a href="https://www.sec.gov/Archives/edgar/data/0000055135/000112760224025633//Archives/edgar/data/55135/000112760224025633/0001127602-24-025633-index.htm">U.S. Securities and Exchange Commission</a> on Wednesday, reflects confidence in the company's potential. The total transaction value is $200,009.
In the Thursday's morning session, Kelly Services's shares are currently trading at $20.62, experiencing a down of 0.0%.
<h3>Delving into Kelly Services's Background</h3>
Kelly Services Inc is a provider of workforce solutions and consulting and staffing services. The company's operations are divided into five business segments namely Professional &amp; Industrial, Science, Engineering &amp; Technology, Education, Outsourcing &amp; Consulting, and International. Other than OCG, each segment delivers talent through staffing services, permanent placement, or outcome-based services. OCG segment delivers talent solutions including managed service providers, payroll process outsourcing, recruitment process outsourcing, and talent advisory services. International also delivers RPO talent solutions within its local markets. The majority of revenue is derived from Professional &amp; Industrial.
<h3>Key Indicators: Kelly Services's Financial Health</h3>
Revenue Growth: Kelly Services's revenue growth over a period of 3 months has faced challenges. As of 30 June, 2024, the company experienced a revenue decline of approximately -13.12%. This indicates a decrease in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Industrials sector.
Profitability Metrics:
<ul>
<li>
Gross Margin: The company shows a low gross margin of 20.21%, suggesting potential challenges in cost control and profitability compared to its peers.
</li>
<li>
Earnings per Share (EPS): With an EPS below industry norms, Kelly Services exhibits below-average bottom-line performance with a current EPS of 0.13.
</li>
</ul>
Debt Management: Kelly Services's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.21.
Insights into Valuation Metrics:
<ul>
<li>
Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 15.62, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
</li>
<li>
Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.17, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.
</li>
<li>
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation &amp; Amortization): With an EV/EBITDA ratio lower than industry averages at 10.38, Kelly Services could be considered undervalued.
</li>
</ul>
Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.
<a href="https://www.schwab.com/brokerage?aff=XEC">Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.</a>
<h3>The Relevance of Insider Transactions</h3>
Insider transactions, although significant, should be considered within the larger context of market analysis and trends.
From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.
While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.
<h3>Cracking Transaction Codes</h3>
When analyzing transactions, <a href="https://www.benzinga.com/money/investing-tools">investors</a> tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase,while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
<a href="https://www.benzinga.com/sec/insider-trades/search/index?company_cik=0000055135">Check Out The Full List Of Kelly Services's Insider Trades.</a>
Insider Buying Alert: Profit from C-Suite Moves
Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-checkout/?t=Be8be9arja3be22in8&amp;utm_source=benzinga-insights">Click here for access</a>.
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Insider Move: Daniel Malan Invests $200K In Kelly Services Stock

It was revealed in a recent SEC filing that Peter Quigley, President and CEO at Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) made a noteworthy insider purchase on October 16,.
What Happened: Quigley's recent move, as outlined in a Form 4 filing with the <a href="https://www.sec.gov/Archives/edgar/data/0000055135/000112760224025635//Archives/edgar/data/55135/000112760224025635/0001127602-24-025635-index.htm">U.S. Securities and Exchange Commission</a> on Wednesday, involves purchasing 9,843 shares of Kelly Services. The total transaction value is $200,009.
Kelly Services shares are trading down 0.0% at $20.62 at the time of this writing on Thursday morning.
<h3>Discovering Kelly Services: A Closer Look</h3>
Kelly Services Inc is a provider of workforce solutions and consulting and staffing services. The company's operations are divided into five business segments namely Professional &amp; Industrial, Science, Engineering &amp; Technology, Education, Outsourcing &amp; Consulting, and International. Other than OCG, each segment delivers talent through staffing services, permanent placement, or outcome-based services. OCG segment delivers talent solutions including managed service providers, payroll process outsourcing, recruitment process outsourcing, and talent advisory services. International also delivers RPO talent solutions within its local markets. The majority of revenue is derived from Professional &amp; Industrial.
<h3>Kelly Services: Financial Performance Dissected</h3>
Decline in Revenue: Over the 3 months period, Kelly Services faced challenges, resulting in a decline of approximately -13.12% in revenue growth as of 30 June, 2024. This signifies a reduction in the company's top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Exploring Profitability:
<ul>
<li>
Gross Margin: The company shows a low gross margin of 20.21%, suggesting potential challenges in cost control and profitability compared to its peers.
</li>
<li>
Earnings per Share (EPS): Kelly Services's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.13.
</li>
</ul>
Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.21.
Evaluating Valuation:
<ul>
<li>
Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 15.62, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
</li>
<li>
Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.17, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.
</li>
<li>
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation &amp; Amortization): At 10.38, Kelly Services's EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation
</li>
</ul>
Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.
<a href="https://www.schwab.com/brokerage?aff=XEC">Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.</a>
<h3>The Impact of Insider Transactions on Investments</h3>
Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.
Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.
Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.
But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
<h3>Cracking Transaction Codes</h3>
<a href="https://www.benzinga.com/money/investing-tools">Investors</a> prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.
<a href="https://www.benzinga.com/sec/insider-trades/search/index?company_cik=0000055135">Check Out The Full List Of Kelly Services's Insider Trades.</a>
Insider Buying Alert: Profit from C-Suite Moves
Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-checkout/?t=Be8be9arja3be22in8&amp;utm_source=benzinga-insights">Click here for access</a>.
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Massive Insider Trade At Kelly Services

Barrington Research analyst Kevin Steinke maintains Kelly Services (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KELYA#NASDAQ">KELYA</a>) with a Outperform and maintains $29 price target.

Barrington Research Maintains Outperform on Kelly Services, Maintains $29 Price Target

Following an orderly transition of responsibilities, Anderson will succeed&nbsp;Olivier Thirot, executive vice president and chief financial officer, who on July 8, 2024, informed Kelly of his intention to retire as an officer of the Company. Upon completion of the transition, Thirot will serve as a strategic advisor to the Company.

Management

Kelly Names Troy Anderson As Executive Vice President And CFO Designate, Effective October 14, 2024

<h4>Key Takeaways:</h4>
<ul>
<li>Shares of Kanzhun fell more than 20% in New York after it issued quarterly results that barely met earlier guidance despite strong profit and revenue growth</li>
<li>The company&rsquo;s core business customers are less willing to pay for its recruitment services as job seekers flood the market</li>
</ul>
By Edith Terry
It almost looks like investors don&rsquo;t like good news. At least that&rsquo;s how it appeared when leading employment services provider&nbsp;Kanzhun Ltd.&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bz#NASDAQ">BZ</a>) announced its&nbsp;<a href="https://www.globenewswire.com/news-release/2024/08/28/2936891/0/en/KANZHUN-LIMITED-Announces-Second-Quarter-2024-Financial-Results.html">second-quarter earnings</a>&nbsp;last week that looked like a winner by most standards.
The operator of China&rsquo;s largest digital recruitment platform reported second-quarter revenue of 1.9 billion yuan ($264 million), up 28.8% from a year earlier. Its net income of 417 million yuan was also up by a healthy 34.8%, and average monthly active users, including both employers and job seekers, rose 25.2% to 54.6 million.
Despite those upbeat numbers, Kanzhun&rsquo;s shares promptly tumbled in both Hong Kong the U.S. after the announcement, including a 21% drop in New York. Why the stampede for the exits?
One reason may be that Kanzhun&rsquo;s revenue came in at the low end of its earlier guidance for between 1.91 billion yuan and 1.96 billion yuan. The second-quarter growth rate also represented a slowdown from the 33.4% growth in the first quarter, when the figure reached 1.7 billion yuan.
But coming in at the bottom end of guidance is only part of the reason for investor skepticism. The company has gone through its shares of ups and downs since its U.S. listing in June 2021 and Hong Kong IPO in December 2022. The stock more than doubled shortly after its U.S. listing, but has been on a steady downward track since then. It made its Hong Kong IPO amid fears of a potential U.S. delisting and a forced six-month pause in its new user signups after a tussle with China&rsquo;s cybersecurity watchdog.
It&rsquo;s quite possible that some investors were scared in these latest results by the cautious note sounded by Kanzhun founder Zhao Peng, who also uses the name Jonathan.
&ldquo;During challenging times, confidence is crucial for everyone, no matter co-investors, co-employees, or potential investors, or prospective talent,&rdquo; Zhao said on the company&rsquo;s earnings call. &ldquo;In tough times, confidence is more valuable than growth. Ensuring profitability for the year will help to sustain confidence in the company, which can be achieved through further refinement of our management.&rdquo;
Investors were also likely concerned at Zhao&rsquo;s observation that recruitment demand weakened in the latter half of the second quarter due to the growing number of job seekers in the market. &ldquo;There were relatively fewer enterprise users and more job seekers in the market,&rdquo; he said. &ldquo;Most enterprise users found it easier to hire a project team that it took three months to fill all the positions in the past, and now only takes two months. This reduces the desire of enterprise users to spend money.&rdquo;
Zhao also promised to expand Kanzhun&rsquo;s $200 million share buyback program, announced in March. True to his word, the company announced a new $150 million buyback program the next day, helping the stock regain some of its earlier losses.
<h3>Strong Growth Targets</h3>
Kanzhun is targeting a full-year non-GAAP operating profit of 2.3 billion yuan, which would be up 40% year-on-year and come through greater economies of scale and cost management, CFO Zhang Yu said on the earnings call. The company is also aiming to sign up 40 million to 45 million new users for the year &ndash; a target that looks quite attainable after it signed up 28 million new users in the first half.
Like many companies in China, Kanzhun recorded steep losses during the pandemic in 2021 and 2022, as the recruitment industry cratered and job mobility all but stopped in the services industry and for new graduates. The unemployment rate for the latter rose to 19.9% in the summer of 2022, giving employers the upper hand ever since.
Kanzhun is China&rsquo;s leader in its core business of selling employment services to businesses. In 2022 its BOSS Zhipin platform had 53.7% of the hiring market with employers, and 46.3% with job seekers, according to data platform Statista. As of the end of April 2024, it had served a cumulative 190 million verified users, including 14 million enterprises.
Online recruitment services to enterprise customers accounted for 1.89 billion yuan in the company&rsquo;s second-quarter revenue, or nearly all of its total, while fees from job seekers made up the rest. Its number of paid enterprise users during the 12 months to June 30 increased by 31% year-on-year to 5.9 million.
Zhao said he would focus on new growth drivers to diversify the company&rsquo;s business, including stepping up blue-collar recruitment and overseas business.
The pivot to more blue collar recruitment comes as China faces dire shortages of skilled manufacturing and logistics workers. The Ministry of Human Resources and Social Security estimated that nearly 30 million manufacturing jobs will go unfilled by 2025. And according to one source, the cost of finding and hiring such workers was more than 10,000 yuan per worker.
Despite its attempts to tap into that market, Kanzhun&rsquo;s blue-collar strategy has gotten off to a rocky start. In March 2024, it acquired 77% of WD Technology Investment Group, which Zhao previously described as &ldquo;the leading manufacturing talent delivery program in China.&rdquo; In the first quarter, the number and growth rate of new blue-collar users for Kanzhun exceeded its white-collar segment.
But by the second quarter, Zhao described the situation as more complicated. &ldquo;The complex relationship between factories, workers, platforms and agents has made it challenging for online platforms to serve blue collar&rdquo; employers and job applicants, he said.
Part of the problem has been rogue agents who falsify information, which Kanzhun has addressed by introducing a system of identifying &ldquo;trustworthy&rdquo; agents. Seasonal issues also affect the business, with hiring reaching a height during the Lunar New Year early each year and then falling back after that.
Nonetheless, factory recruitment, followed by logistics, are outperforming all other industries, Zhao said. &ldquo;We believe this is the first real chance for the online recruitment platform to go into the blue-collar manufacturing industry and make some real money,&rdquo; he added.
With its trailing price to earnings (P/E) ratio of 28, Kanzhun is not cheap but is comparable to smaller peer&nbsp;Tongdao Liepin&nbsp;(6100.HK), which trades at 24. Global giants like&nbsp;Adecco&nbsp;(ADIA.F) and&nbsp;Kelly Services&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/kelya#NASDAQ">KELYA</a>) trade lower with P/E ratios of 17 and 16, respectively, showing the Chinese companies are still valued notably higher than their larger global peers. But the premium gap could narrow if Chinese companies rein in their spending on hiring as the nation&rsquo;s economy slows.
This article is from an unpaid external contributor. It does not represent Benzinga&#39;s reporting and has not been edited for content or accuracy.

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