Industry Overview - The Staffing Firms industry is expected to gradually recover to pre-pandemic levels, enabling companies to pay regular dividends [1] - The industry encompasses a wide range of human resources and workforce solutions, including recruitment, payroll administration, and organizational planning [2] Market Trends - There is stable demand in the mature business services industry, with revenues and cash flows anticipated to recover to pre-pandemic levels [3] - The adoption of remote work and hybrid models has significantly increased, prompting staffing agencies to focus on flexible staffing solutions [4] - Technological advancements are being implemented to enhance operational efficiency, with AI-driven tools and platforms becoming more prevalent [5] Industry Performance - The Zacks Staffing Firms industry currently holds a Zacks Industry Rank of 227, placing it in the bottom 7% of 244 Zacks industries, indicating sluggish near-term prospects [6] - Over the past year, the industry has underperformed the S&P 500, declining 39.2% compared to the S&P 500's growth of 18.9% [8] Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 5.76X, significantly lower than the S&P 500's 18.98X and the sector's 10.7X [9] Company Highlights Resources Connection (RGP) - RGP has seen favorable international growth, particularly in Europe, India, Japan, and the Philippines, with steady revenues and improved gross margins [14] - The company holds $90 million in cash with zero current debt, indicating a strong balance sheet [16] - RGP's current ratio is 2.64, suggesting strong short-term debt coverage capability [16] - The Zacks Consensus Estimate for RGP's 2025 earnings per share has been revised up by 14.3% [17] Kforce (KFRC) - Kforce reported a top line of $332.6 million and 63 cents in EPS, exceeding expectations [18] - The company maintains a strong balance sheet with zero current debt and a current ratio of 1.88 [20] - KFRC's shares have gained 21.1% over the past three months [21] HireQuest (HQI) - HQI's system-wide sales grew 6.1% year-over-year, with a net income of $2.3 million in the third quarter of 2025 [21][22] - The company's current ratio is 2.4, indicating a strong liquidity position [23] - HQI's shares have gained 29.6% over the past three months [23]