Is Robert Half (RHI) Fully Valued Following Its Buyback Completion And Dividend Update?
Robert Half (RHI) has closed a long running capital return chapter. The company reported that it has now completed the share repurchase program launched in February 2018, alongside affirming its regular quarterly dividend.
See our latest analysis for Robert Half.
At a share price of $43.22, Robert Half has seen a 90 day share price return of 65.09% and a year to date share price return of 58.08%, while the 5 year total shareholder return is down 48.82%. This suggests that recent momentum has picked up after a weaker longer term experience.
If Robert Half’s recent rebound has you thinking about what else is moving, this is a good time to broaden your search and check out 21 top founder-led companies
Robert Half has a long history, a sizable talent and consulting platform, and fresh support from buybacks and dividends behind it. After such a sharp rebound, the key issue now is whether the stock’s current price still makes sense.
Most Popular Narrative: 23.5% Overvalued
Analysts following Robert Half see fair value at $35. This sits below the recent $43.22 close and frames the latest rally as stretched against their assumptions.
The analysts have a consensus price target of $35.0 for Robert Half based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $50.0, and the most bearish reporting a price target of just $20.0.
Want to see why this narrative lands below today’s price? The story leans heavily on specific revenue growth, margin recovery, and a future earnings multiple that all have to line up.
Result: Fair Value of $35 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the narrative can crack if revenue keeps slipping in key Talent Solutions lines or if higher SG&A costs keep squeezing Robert Half’s already thin margins.
Find out about the key risks to this Robert Half narrative.
Another View on Robert Half’s Value
Our DCF model for Robert Half points in the opposite direction to the analyst narrative. On this view, the stock at $43.22 is trading at a 45.4% discount to an estimated future cash flow value of $79.10, which frames the current price as potentially too low rather than stretched. Which set of assumptions do you trust more?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Robert Half for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed messages on Robert Half so far. If the split between upside and downside drivers has your attention, move quickly and weigh the 2 key rewards and 2 important warning signs
Looking for more investment ideas beyond Robert Half?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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