Unpacking Q3 Earnings: First Advantage (NASDAQ:FA) In The Context Of Other Professional Staffing & HR Solutions Stocks

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how First Advantage (NASDAQ:FA) and the rest of the professional staffing & hr solutions stocks fared in Q3.

The Professional Staffing & HR Solutions subsector within Business Services is set to benefit from evolving workforce trends, including the rise of remote work and the gig economy. With companies casting a wider net to find talent due to remote work, the expertise of staffing and recruiting companies is even more valuable. For those who invest wisely, the use of predictive AI in recruitment and screening as well as automation in HR workflows can enhance efficiency and scalability. On the other hand, digitization means that talent discovery is less of a manual process, opening the door for tech-first platforms. Additionally, regulatory scrutiny around data privacy in HR is evolving and may require companies in this sector to change their go-to-market strategies over time.

The 8 professional staffing & HR solutions stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was 1.1% below.

While some professional staffing & hr solutions stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4% since the latest earnings results.

First Advantage (NASDAQ:FA)

Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ:FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.

First Advantage reported revenues of $409.2 million, up 105% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.

“We delivered another quarter of profitable growth through continuing go-to-market success in new logo and upsell/cross-sell, demonstrating our ability to perform amid the current uncertain macroeconomic environment in which hiring growth has been consistently flat. Our strategy of diversified exposure across verticals and geographies supported our results with strong momentum in our retail & e-commerce and transportation & logistics verticals, and for the sixth quarter in a row, our International business has achieved year-over-year revenue growth,” said Scott Staples, Chief Executive Officer.

First Advantage scored the fastest revenue growth and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 9.6% since reporting and currently trades at $14.17.

Is now the time to buy First Advantage? Access our full analysis of the earnings results here, it’s free.

Best Q3: Kforce (NYSE:KFRC)

With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE:KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.

Kforce reported revenues of $332.6 million, down 5.9% year on year, outperforming analysts’ expectations by 1.5%. The business had an exceptional quarter with revenue guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

The market seems happy with the results as the stock is up 36.5% since reporting. It currently trades at $33.51.

Is now the time to buy Kforce? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Insperity (NYSE:NSP)

Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE:NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.

Insperity reported revenues of $1.62 billion, up 4% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.

The stock is flat since the results and currently trades at $45.36.

Read our full analysis of Insperity’s results here.

Barrett (NASDAQ:BBSI)

Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.

Barrett reported revenues of $318.9 million, up 8.4% year on year. This result met analysts’ expectations. Zooming out, it was a slower quarter as it recorded a miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.

The stock is down 7.1% since reporting and currently trades at $37.84.

Read our full, actionable report on Barrett here, it’s free.

Alight (NYSE:ALIT)

Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.

Alight reported revenues of $533 million, down 4% year on year. This number missed analysts’ expectations by 0.7%. It was a disappointing quarter as it also produced a significant miss of analysts’ full-year EPS guidance estimates and EPS in line with analysts’ estimates.

Alight had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is down 43.2% since reporting and currently trades at $1.56.

Read our full, actionable report on Alight here, it’s free.

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