Kforce, Inc

Kforce (KFRC - Snapshot Report) is a Zacks #1 Rank (Strong Buy) thanks to upward revisions following its November earnings release. Growth rates are rising but you can still get shares of KFRC at a good price.

Company Description

Kforce is a professional staffing company that serves a broad range of industries. The company's 63 offices in U.S. work with technology, finance & accounting, and health and life science companies. Kforce also has 1 office in the Philippines.

Good Quarter, Solid Demand

On Nov 1 Kforce reported third-quarter results that included record-setting revenue at $289 million. The company said demand continues to be solid.

Earnings per share came in at $0.22, meeting the Zacks Consensus Estimate and up 29% from a year ago. Additionally, the company had bought up 13% of the outstanding shares which helped out the EPS figure.

Throughout the year Kforce has been scooping up shares, but the company ramped up the buyback effort in the third quarter by buying 4.6 million shares, 10.8% of the outstanding shares.

Forecasts Rising

Given the demand trends and share buybacks, analysts raised estimates even though there was no earnings surprise last quarter. The full-year Zacks Consensus Estimate for 2011 is up 5 cents, to $0.69.

Next year's average projection is up 3 cents, to $0.89. Given the $0.51 earned in 2010 and the projected growth rates are at 36% and 23%, respectively.

Valuations

Shares of KFRC are going for under 18 times forward estimates and with a 22% long-term growth rate the PEG is at 0.8. The price to sales is just 0.4 times and the stock is going for 1.9 times book value.

The Chart

KFRC has been pretty volatile since its earnings release. Party because traders are still wrestling with sliding estimates earlier this year. But, if earnings are back on track, as they seem to be, the stock should work its way higher.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service

Read the full analyst report on KFRC