Kelly Services (KELYA) Stock Forecast & Price Target

Kelly Services Inc. has demonstrated a robust capacity for revenue growth, particularly through its higher-margin outcome-based solutions, which have been pivotal in enhancing profitability beyond traditional temporary staffing services. The company's Education segment has notably expanded, increasing its revenue from $450 million in 2019 to an anticipated run-rate exceeding $1 billion in 2025, indicating strong market demand for its K-12 substitute teacher staffing solutions. Additionally, the continued growth of Payroll Process Outsourcing (PPO) within Talent Solutions, coupled with improving economic conditions, positions Kelly Services favorably as businesses seek flexible staffing solutions to meet evolving demands.

Kelly Services Inc. reported a significant decline in financial performance, with Q3/25 adjusted EPS dropping 14% year-over-year to $0.18, which was considerably below both internal estimates and consensus expectations. The company's revenue also fell by 2% year-over-year, failing to meet its projected growth of 1% to 3%, with the Enterprise Talent Management segment experiencing a notable 13.1% decrease in revenue. Furthermore, the forecast for Q4/25 predicts a continued decline in adjusted EBITDA margins by 70 basis points, coupled with a sharp 37% year-over-year decrease in adjusted EBITDA for Q3/25, reinforcing concerns about the company’s ongoing profitability and operational challenges.