Why Kforce Stock Is Going to the Moon Today
Key Points
Kforce posted Q1 earnings that were much better than expected.
The company's sales in the first quarter also topped Wall Street's estimates.
Management's forward guidance suggests that the business's near-term growth outlook is much stronger than previously anticipated.
Kforce (NYSE: KFRC) stock is seeing a day of monster gains in Tuesday's trading. The company's share price had rocketed 44.9% higher in the daily session as of 2 p.m. ET despite the S&P 500 being down 0.6% and the Nasdaq Composite being down 1.1% at the same point in the day's trading.
Kforce published its first-quarter results after yesterday's market close, and performance for the period topped Wall Street's expectations. Following today's dramatic valuation surge, the stock is up roughly 50% year to date.
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Kforce posted better-than-expected Q1 results
Kforce recorded earnings per share of $0.46 in the first quarter, significantly exceeding the average Wall Street analyst estimate's call for per-share earnings of $0.39 in the period. The company's sales of $330.4 million in the period also beat the average analyst estimate by roughly $1 million. While revenue was up just 0.1% year over year, the business avoided the sales decline that analysts had expected -- and profitability was significantly better than anticipated in the period.
What's next for Kforce?
For the current quarter, Kforce is guiding for sales to be between $344 million and $352 million -- good for annual growth of roughly 4%. Hitting the midpoint target would also mean delivering sequential quarterly growth of roughly 5%. The staffing solutions company's unexpected return to posting meaningful sales growth has caused investors to reassess the company's outlook, and management's target for per-share net income between $0.67 and $0.75 this quarter suggests midpoint earnings growth of 20% and a shifting profit story.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.