Robert Half Inc. (NYSE:RHI) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Last week saw the newest first-quarter earnings release from Robert Half Inc. (NYSE:RHI), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of US$1.5b and statutory earnings per share of US$0.61. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Robert Half

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Following the recent earnings report, the consensus from eleven analysts covering Robert Half is for revenues of US$6.00b in 2024. This implies a measurable 2.5% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to descend 12% to US$3.02 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$6.17b and earnings per share (EPS) of US$3.35 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of US$70.55, suggesting the downgrades are not expected to have a long-term impact on Robert Half's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Robert Half at US$100.00 per share, while the most bearish prices it at US$55.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.3% by the end of 2024. This indicates a significant reduction from annual growth of 4.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. It's pretty clear that Robert Half's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$70.55, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Robert Half analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Robert Half that you need to be mindful of.

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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.