Kelly Services (KELYA) Stock Forecast & Price Target

Kelly Services, Inc. demonstrates a strong outlook due to its ability to significantly enhance fill rates for K-12 substitute teacher staffing, reinforcing the rationale for school districts to outsource this function. The company has experienced revenue growth in the first half of 2025, bolstered by the acquisition of MRP and ongoing expansion in payroll process outsourcing. Additionally, forecasts indicate a 50 basis points increase in adjusted EBITDA margins to 3.3% for 2026, driven by efficiencies and optimization strategies, which further underpin the positive financial trajectory of the firm.

Kelly Services Inc. has reported a concerning decline in its Q3/25 adjusted EPS, which fell 14% year-over-year to $0.18, significantly underperforming both company estimates and consensus expectations. Additionally, the company's Q4/25 revenue forecast indicated an 11.9% year-over-year decrease, slightly surpassing projections, and revealing a wider trend of diminishing performance especially in the Enterprise Talent Management segment, which represents over half of total revenue with a decline of 13.1% year-over-year. Furthermore, the anticipated adjusted EBITDA margin decline of 70 basis points year-over-year to approximately 3% in Q4/25, coupled with an underlying revenue forecast of a 4% to 6% decline, highlights ongoing challenges in maintaining profitability and growth.