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Robert Half (RHI) Hits 52-Week High, Can the Run Continue?

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Have you been paying attention to shares of Robert Half International (RHI - Free Report) ? Shares have been on the move with the stock up 6.4% over the past month. The stock hit a new 52-week high of $104.73 in the previous session. Robert Half International has gained 66.3% since the start of the year compared to the -16.4% move for the Zacks Business Services sector and the 45.9% return for the Zacks Staffing Firms industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 22, 2021, Robert Half reported EPS of $1.33 versus consensus estimate of $1.05.

For the current fiscal year, Robert Half is expected to post earnings of $4.89 per share on $6.26 billion in revenues. This represents an 81.11% change in EPS on a 22.61% change in revenues. For the next fiscal year, the company is expected to earn $5.11 per share on $6.65 billion in revenues. This represents a year-over-year change of 4.65% and 6.23%, respectively.

Valuation Metrics

Robert Half may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Robert Half has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 21.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 30.5X versus its peer group's average of 15X. Additionally, the stock has a PEG ratio of 1.09. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Robert Half currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Robert Half meets the list of requirements. Thus, it seems as though Robert Half shares could have a bit more room to run in the near term.

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