Kelly Services (KELYA) Stock Forecast & Price Target

Kelly Services Inc. demonstrates a robust positive outlook due to strong revenue growth in its Education segment, which continues to expand its influence in K-12 staffing solutions, reflected in a year-over-year revenue increase of 1.3%. The company is also experiencing continued growth in its Payroll Process Outsourcing (PPO) services, contributing to overall revenue gains in Talent Solutions. Additionally, expectations of adjusted EBITDA margin expansion, supported by strategic efficiency initiatives and the recent appointment of a Chief Growth Officer, signal potential for enhanced profitability moving forward.

Kelly Services Inc. reported a significant decline in key financial metrics for Q3/25, with adjusted EPS decreasing by 14% year-over-year to $0.18, which fell short of both internal estimates and consensus expectations. The company also experienced an 11.9% year-over-year revenue decline for Q4/25, which, although slightly above management's guidance, indicates ongoing challenges in sustaining revenue growth, particularly in the Enterprise Talent Management segment that represents over half of total revenues. Furthermore, the company's adjusted EBITDA fell by 37% year-over-year to $16.5 million, highlighting deteriorating profitability and a forecasted decline in adjusted EBITDA margins, which reflects a broader trend of operational struggles.