Kelly Services (KELYA) Stock Forecast & Price Target

Kelly Services Inc. has demonstrated a strong trajectory of revenue growth, particularly in its higher-margin outcome-based solutions, driving overall financial performance amid competitive pressures. The significant expansion of the Education segment, which has increased from $450 million in 2019 to an annual run-rate exceeding $1 billion in 2025, underscores the company's ability to capitalize on demand for staffing solutions in the K-12 sector. Furthermore, an uptick in payroll process outsourcing and an improving economic landscape suggest that businesses are increasingly relying on flexible staffing solutions, positioning Kelly Services favorably for sustained growth.

Kelly Services Inc. has reported a notable decline in its financial performance, indicated by a 14% year-over-year decrease in adjusted EPS for Q3/25, falling significantly short of both internal estimates and consensus expectations. Revenue also fell short, with a 2% year-over-year decline that contrasts with the company's projected growth range and is compounded by a substantial 13.1% revenue drop in its Enterprise Talent Management segment, which constitutes 52% of total revenue. Furthermore, a projected 70 basis points decline in adjusted EBITDA margin to approximately 3% for Q4/25, coupled with a 37% year-over-year drop in adjusted EBITDA, underscores ongoing challenges in maintaining profitability across its operational segments.