A month has gone by since the last earnings report for Robert Half (RHI Quick QuoteRHI - Free Report) . Shares have lost about 8.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Robert Half due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Robert Half Q1 Earnings Beat Estimates

Robert Half International Inc. reported impressive first-quarter 2023 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.

Quarterly earnings of $1.14 per share beat the consensus mark by 1.8% but declined 25% year over year. The bottom-line surpassed our estimate by 3.6%.

Revenues of $1.72 billion beat the consensus mark by a slight margin but decreased 5.4% year over year. The top line surpassed our estimate by a slight margin. 

Talent Solutions Revenues Down, Protiviti Up

Talent Solutions’ revenues of $1.22 billion decreased 9% year over year on an as-adjusted basis. U.S. Talent Solutions’ revenues of $944 million were down 11% year over year. Non-U.S. Talent Solutions revenues decreased 3% year over year on an adjusted basis to $278 million.

Protiviti revenues came in at $494 million, up 4% year over year on an as-adjusted basis. U.S. Protiviti revenues of $397 million increased 6% year over year on an adjusted basis. Non-U.S. Protiviti revenues of $97 million declined 1% year over year on an as-adjusted basis.

The quarter had 63.3 billing days compared with 62.4 billing days in the year-ago quarter. At present, Robert Half operates 317 talent solutions locations worldwide, with 86 locations situated in 18 countries outside the United States.

Currency exchange rate movements decreased total revenues by $21 million, Talent Solutions revenues by $15 million and Protiviti revenues by $6 million.

Margins Contract

Adjusted gross profit in the quarter was $689.7 million, down 10.6% year over year. The adjusted gross profit margin of 40.2% declined 230 basis points year over year.

Key Balance Sheet and Cash Flow Figures

Robert Half ended the quarter with a cash and cash equivalent balance of $547.7 million compared with $658.6 million witnessed at the previous-quarter end. The company generated $66 million of cash from operations while capital expenditures were $9.4 million. It paid out $54 million in dividends and repurchased shares worth $38 million in the reported period.

Q2 Guidance

For the second quarter of 2023, Robert Half expects revenues of $1.655-$1.735 billion. EPS is expected between $1.09 and $1.19.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Robert Half has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Robert Half has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.