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3 Reasons Why Robert Half is Poised on Growth Trajectory


Robert Half International Inc. RHI has been steadily gaining from robust trends in the international hiring market. Moreover, improved labor market conditions in the United States have bolstered investor’s optimism in the stock. Consequently, shares of this Zacks Rank #1 (Strong Buy) company returned 14.1% in the past three months, compared with the industry’s rally of 13.3%.

International Hiring Markets: A Vital Growth Driver

Robert Half’s international revenues have been surging owing to rising demand for professional staffing services. This has been a persistent trend since the first quarter of 2014. Further, the company’s temporary staffing services have been on the rise globally, as employers are building flexible staffing options in human resources plans. The company has also been investing heavily in tapping the evolving prospects in the technology staffing area, over the past few years.

Notably, international revenue growth, mainly from the European regions provided some cushion to Robert Half’s otherwise soft figures in third-quarter 2017. During the quarter, currency-neutral staffing revenues from international regions jumped 11% from the prior-year quarter. Also, international revenues grew 12% year on year in the Protiviti segment.

Investing in Technology

Robert Half has been utilizing a major share of its capital expenditures on investments in software initiatives and technology infrastructure. Important software initiatives include upgrades to enterprise resource planning applications and the implementation of a global, cloud-based customer relationship management application. Further, the company continues to invest in digital technology initiatives to enhance service offerings to clients and candidates. In this regard, Robert Half completed the global rollout of its CRM software in 2017, and also launched a website.

Improving U.S Hiring Market

While Robert Half’s U.S. revenues were soft in the third quarter, management noted that hiring market trends started improving in September and continued till October. Evidently, temporary and consulting staffing revenues grew 2.1% in September and 2% in the first two weeks of October. Also, permanent placement revenues advanced 7.2% in September and surged 21% in the first three weeks of October.

Moreover, the recently enacted Tax Cuts and Jobs Act are expected to create more jobs owing to its positive impacts on the economic conditions. The benefits from lower tax rates may propel companies to allocate more capital for increasing headcount to support business growth. Such factors can significantly bolster Robert Half’s hiring services in the forthcoming periods. Moreover, tax reforms are expected to aid the company in retaining profits and allocate more funds toward technological reformations and development efforts.

Wrapping Up

Backed by solid international and gradually improving U.S. hiring market trends, we expect Robert Half to continue on its growth path. Further, the company’s efforts to improve technology infrastructure is noteworthy and is expected to boost business in the forthcoming periods.

Looking For More? Check These Three Picks

Investors may also consider other top-ranked stocks from the same sector such as MDC Partners Inc. MDCA, Thomson Reuters Corp TRI and Total System Services, Inc. TSS, all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MDC Partners delivered an average positive earnings surprise of 133.8% in the trailing four quarters. It has a long-term earnings growth rate of 6%.

Thomson Reuters pulled off an average positive earnings surprise of 14.3% in the trailing four quarters. It has a long-term earnings growth rate of 8.3%

Total System Services came up with an average positive earnings surprise of 5.7% in the trailing four quarters. It has a long-term earnings growth rate of 12.7%.

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