Kforce (KFRC:NAS) Fundamental Valuation Report

Kforce (KFRC:NAS) Fundamental Valuation Report

Fundamental Valuation Report


Industrials:Staffing & Employment Services

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$52.70 (USD) 03/19/2021

Weighted Valuation
$45.00 (USD)

Overall Rating
Overvalued by 14.6%

Valuation Models Comparables: $45.02 (USD)
Multiples: $44.12 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation
According to Analyst consensus at $45.00 this stock is Overvalued

Company Overview (KFRC:NAS USD)

Price 52.70
Range 51.90 – 53.15
52 week 23.93 – 54.35
Open 52.79
Vol / Avg. 204240/136832
Mkt cap 1.16B
P/E 20.11
Div/yield 0.80/0.02
EPS 2.62
Shares 22.09M
Beta 1.44

Company Description

Kforce Inc provides professional and technical specialty staffing services and solutions. The company operates three business segments: technology, finance and accounting, and government solutions. Its largest segment by revenue, technology, offers temporary staffing and permanent placement services focusing on system architecture and development, project management, enterprise data management, e-commerce, and security. The remaining operating units provide staffing for general accounting, financial analysis, and technology. Its primary revenue driver for the company is temporary placements. The largest end market is the United States.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for KFRC:NAS

Using a discounted cash flow model we generated an intrinsic value of $36.45 (USD) for KFRC:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

KFRC:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $36.45 1% 5% 1% 5%
WACC (or Ke) 9.09 $44.44 $30.72
Terminal Growth Rate 3.00 $31.32 $43.60
Tax Rate 0.26 $39.47 $33.44
Cash Flow 87,262,630 $34.21 $38.70
Capital Expenditures 0 $36.45 $36.45
Long Term Debt 104,988,000 $36.69 $36.21

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $45.02 (USD) for KFRC:NAS. We also generated a valuation of $57.77 (USD) using other metrics and comparables.
The comparable companies were Mastech Digital (MHH:ASE), Trinet Group (TNET:NYS), HireQuest (HQI:NAS), ASGN (ASGN:NYS) and Kelly Services (KELYB:NAS).

Company KFRC:NAS End Date Value
Earnings/Share $2.53 (USD)
Book Value/Share $8.15 (USD)
Sales/Share $65.33 (USD)
Cash Flow/Share $5.10 (USD)
EBITDA/Share $3.86 (USD)
Price Based on Comps Adjustment Factor (%)
$59.16 (USD) -15.6
$36.91 (USD) -12.0
$65.22 (USD) -64.0
$50.15 (USD) 0.0
$65.31 (USD) 6.3
20.11 PE Ratio 23.41 21.45 20.23 25.33 26.62 0.00
6.47 PB Ratio 4.53 3.41 8.78 6.42 3.34 0.70
0.81 PS Ratio 3.58 1.10 1.36 13.92 1.35 0.19
10.33 PCF Ratio 10.89 10.02 10.05 17.30 12.55 4.54
13.81 EV to EBITDA 16.94 12.73 11.76 27.88 15.38 0.00


Using a multiples approach we generated a valuation of  $44.12 (USD) for KFRC:NAS

Company KFRC:NAS End Date Value
Earnings/Share $2.62 (USD)
Book Value/Share $8.15 (USD)
Sales/Share $65.33 (USD)
Cash Flow/Share $5.10 (USD)
EBITDA/Share $4.00 (USD)
Price Based on Comps Adjustment Factor
$42.04 (USD) 0
$39.10 (USD) 0
$35.67 (USD) 0
$62.20 (USD) 0
$41.61 (USD) 0
Ratios Ratio Average
PE Ratio 16.05
PB Ratio 4.80
PS Ratio 0.55
PCF Ratio 12.19
EV to EBITDA 10.41

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  KFRC:NAS for the last 10 years was  4.73

We ran the Adjusted Book Value for  KFRC:NAS and generated a book value of  $8.12 (USD)
By multiplying these we get an adjusted valuation of  $38.36 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for KFRC:NAS. The 1 analysts have a concensus valuation for KFRC:NAS for 2021 of $45.00 (USD).


Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 2 0 3.0000 Hold 2021-3-18

Current Price: 52.7 USD

Analyst Consensus
USD Millions 2021 2022
Mean EPS 2.83 3.15
# EPS Analysts 2 2
Mean Revenue 1,405.00 1,465.00
# Revenue Analysts 1 1
Mean Target Price 45.00
Mean Cash Flow 4.00 3.69
Mean EBITDA 91.70 93.10
Mean Net Income 60.00
Mean Debt Outstanding 33.80 83.30
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 7.00 7.30

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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