ManpowerGroup (MAN): Buy, Sell, or Hold Post Q1 Earnings?

ManpowerGroup has gotten torched over the last six months - since December 2024, its stock price has dropped 34.2% to $40.76 per share. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Is now the time to buy ManpowerGroup, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Do We Think ManpowerGroup Will Underperform?

Even with the cheaper entry price, we're swiping left on ManpowerGroup for now. Here are three reasons why we avoid MAN and a stock we'd rather own.

1. Core Business Falling Behind as Demand Declines

Investors interested in Professional Staffing & HR Solutions companies should track organic revenue in addition to reported revenue. This metric gives visibility into ManpowerGroup’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, ManpowerGroup’s organic revenue averaged 3.5% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests ManpowerGroup might have to lean into acquisitions to grow, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus).

2. Revenue Projections Show Stormy Skies Ahead

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect ManpowerGroup’s revenue to drop by 2.3%. Although this projection is better than its two-year trend, it's hard to get excited about a company that is struggling with demand.

3. EPS Trending Down

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Sadly for ManpowerGroup, its EPS declined by 19.7% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

Final Judgment

ManpowerGroup falls short of our quality standards. Following the recent decline, the stock trades at 9.8× forward P/E (or $40.76 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are more exciting stocks to buy at the moment. We’d recommend looking at a top digital advertising platform riding the creator economy.

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