Robert Half Inc. (NYSE:RHI) Just Reported And Analysts Have Been Lifting Their Price Targets
The investors in Robert Half Inc.'s (NYSE:RHI) will be rubbing their hands together with glee today, after the share price leapt 38% to US$45.87 in the week following its quarterly results. The result was positive overall - although revenues of US$1.4b were in line with what the analysts predicted, Robert Half surprised by delivering a statutory profit of US$0.49 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Robert Half's nine analysts are now forecasting revenues of US$5.54b in 2027. This would be a reasonable 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 65% to US$2.00. In the lead-up to this report, the analysts had been modelling revenues of US$5.53b and earnings per share (EPS) of US$1.97 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Robert Half
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 13% to US$39.56. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Robert Half analyst has a price target of US$53.00 per share, while the most pessimistic values it at US$20.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Robert Half's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.7% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 6.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.1% annually for the foreseeable future. So although Robert Half's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Robert Half's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Robert Half going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Robert Half that you should be aware of.
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