Robert Half's (RHI) Capital Position a Boon, Cost Woes a Bane

Zacks Equity Research

29 August 2022 at 4:09 pm·2-min read

Robert Half International Inc. RHI is currently benefiting from its strong liquidity and wholly owned subsidiary Protiviti.

RHI earnings and revenues are anticipated to grow 18.1% and 15.4%, respectively, in 2022. RHI has a long-term earnings growth expectation of 3.6%.

Factors That Augur Well

Robert Half offers risk consulting, internal audit and information technology consulting services through its wholly-owned subsidiary Protiviti, which is in great shape. Protiviti is firmly positioned in the market and is currently boasts a healthy margin in double digits and grosses revenues.

For the second quarter of 2022, Protiviti’s revenues came in at $497 million, up 11% year over year on an as-adjusted basis. The U.S. Protiviti revenues of $396 million increased 8% year over year on an adjusted basis. Non-U.S. Protiviti revenues of $101 million increased 21% year over year on an as-adjusted basis.

Robert Half’s current ratio (a measure of liquidity) stood at 2.32 at the end of second-quarter 2022, higher than the 1.76 recorded at the end of the prior quarter and the prior-year quarter’s 1.72. The gradually increasing current ratio bodes well for Robert Half. Moreover, a current ratio of more than 1.5 is usually considered good for a company. This may imply that the risk of default is less.

A Key Risk

Robert Half is witnessing an increase in expenses due to the rise in staff compensation costs and heavy investments in technology initiatives. Hence, RHI's bottom line is likely to remain under pressure going forward.

Zacks Rank and Stocks to Consider

Robert Half currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. CAR, Genpact Limited G and CRA International, Inc. CRAI.

Avis Budget sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 108.4% for 2022.

Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.

Genpact carries a Zacks Rank #2 (Buy) at present. G has a long-term earnings growth expectation of 12.3%.

Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.

CRA International flaunts a Zacks Rank of 1, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.

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Charles River Associates (CRAI) : Free Stock Analysis Report

Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report

Genpact Limited (G) : Free Stock Analysis Report

Robert Half International Inc. (RHI) : Free Stock Analysis Report

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Factors That Augur Well

A Key Risk

Zacks Rank and Stocks to Consider

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