Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at First Advantage (NASDAQ:FA) and the best and worst performers in the professional staffing & hr solutions industry.
The Professional Staffing & HR Solutions subsector within Business Services is set to benefit from evolving workforce trends, including the rise of remote work and the gig economy. With companies casting a wider net to find talent due to remote work, the expertise of staffing and recruiting companies is even more valuable. For those who invest wisely, the use of predictive AI in recruitment and screening as well as automation in HR workflows can enhance efficiency and scalability. On the other hand, digitization means that talent discovery is less of a manual process, opening the door for tech-first platforms. Additionally, regulatory scrutiny around data privacy in HR is evolving and may require companies in this sector to change their go-to-market strategies over time.
The 8 professional staffing & hr solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 12% since the latest earnings results.
Best Q2: First Advantage (NASDAQ:FA)
Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ:FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
First Advantage reported revenues of $390.6 million, up 112% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and a decent beat of analysts’ full-year EPS guidance estimates.
“During the second quarter, we delivered solid financial performance at the top end of our previously stated expectations, despite continuing uncertainty within macroeconomic trends. Our balanced vertical strategy and market reach, combined with our consistent go-to-market execution, underpins the strength and resiliency of our business model. We continue to advance on our FA 5.0 strategic priorities, including seamlessly integrating our acquisition of Sterling and executing our best-of-breed product, data, and technology strategy. In addition, we are encouraged by continuing momentum in our international markets and are seeing strong customer interest in our Digital Identity solutions,” said Scott Staples, Chief Executive Officer.
First Advantage pulled off the fastest revenue growth and highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 3.2% since reporting and currently trades at $15.70.
Is now the time to buy First Advantage? Access our full analysis of the earnings results here, it’s free.
ManpowerGroup (NYSE:MAN)
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
ManpowerGroup reported revenues of $4.52 billion, flat year on year, outperforming analysts’ expectations by 3.6%. The business had a strong quarter with an impressive beat of analysts’ EPS guidance for next quarter estimates and a solid beat of analysts’ organic revenue estimates.
ManpowerGroup achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 11.1% since reporting. It currently trades at $38.36.
Is now the time to buy ManpowerGroup? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Insperity (NYSE:NSP)
Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE:NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.
Insperity reported revenues of $1.66 billion, up 3.3% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ EPS guidance for next quarter estimates and a significant miss of analysts’ EPS estimates.
Insperity delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 10.3% since the results and currently trades at $53.47.
Read our full analysis of Insperity’s results here.
Barrett (NASDAQ:BBSI)
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Barrett reported revenues of $307.7 million, up 10% year on year. This print topped analysts’ expectations by 2.6%. It was a strong quarter as it also produced a beat of analysts’ EPS estimates.
The stock is up 5.9% since reporting and currently trades at $47.04.
Read our full, actionable report on Barrett here, it’s free.
Robert Half (NYSE:RHI)
With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE:RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.
Robert Half reported revenues of $1.37 billion, down 7% year on year. This number beat analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter as it also logged EPS in line with analysts’ estimates.
Robert Half had the slowest revenue growth among its peers. The stock is down 15.5% since reporting and currently trades at $35.85.
Read our full, actionable report on Robert Half here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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