Kforce and robert half business differences

Date: Oct 8, 2024

Author: Handzalah

With Robert Half’s market cap close to $7 billion, it is significantly larger than Kforce. Kforce is a competitor to Robert Half and I took interest in studying its business. This article is intended to give a surface level understanding of both businesses and what makes them different. One key differentiating factor is their segment of revenues. Robert Half focuses on FA (finance and accounting). FA contributes significantly to total Robert Half’s revenue. On the opposing side, Kforce focuses on technology segment. Their technology segment of revenue contributed most to overall revenue. They recently repositioned their FA segment which is their remaining segment of revenue. They shifted to higher skill roles. This is to protect from the susceptibility of AI taking over repetitive jobs. The differences in the concentration of segment revenues for both companies also impact their operating margins. With the recent macroeconomic uncertainties and AI advancements, Kforce had a more stable operating margins while Robert Half had a volatile swing in operating margins. Robert Half’s operating margin over the years are larger than Kforce. But who knows if that’ll continue forever.  Robert Half has a cleaner balance sheet. But both companies seem to be growing and seem to have great management. Both repurchased a significant amount of common stock within the span of 10 years. They both pay dividends. Both companies also have high ROIC and ROE. Both companies seem to be worth further research due to potentially having above market return from market mispricing.