Management Guidance And Market Uncertainty Will Shape The Next Phase

Key Takeaways

• Growing demand for tech and finance talent, regulatory changes, and flexible work models are expected to expand Robert Half's revenue and margin opportunities.
  
• Investments in AI recruitment technology and strong capital management position the company for greater efficiency, market share growth, and improved shareholder returns.
  
• Persistent revenue declines, rising costs, and weak demand signal ongoing challenges in growth, profitability, and competitiveness, with legacy business risks and digital competition intensifying headwinds.

Catalysts

Provides talent solutions and business consulting services in the United States and internationally.

• As businesses continue investing in digitization and business transformation-including technology modernization, AI readiness, ERP upgrades, and cybersecurity-the demand for skilled technology and finance talent is expected to remain strong, positioning Robert Half to benefit from a growing total addressable market and drive future revenue growth.
  
• The ongoing shift toward flexible workforce models-such as remote/hybrid work and contingent staffing-broadens accessible talent pools and increases the need for specialized placement and consulting solutions, likely leading to higher placement volumes and expanding Robert Half's revenue base.
  
• Increasing regulatory complexity and risk management requirements globally are fueling demand for consulting and interim professional services, supporting higher growth and margin expansion opportunities for Protiviti and reinforcing Robert Half's differentiated value proposition, which can improve both revenue and operating margins.
  
• Significant investments in AI-driven recruitment technology and digital platforms are expected to lower cost per placement, boost candidate quality, and improve productivity, creating potential for enhanced net margins over time.
  
• The company's robust balance sheet and disciplined capital allocation-evident in consistent dividends and share buybacks-position Robert Half to accelerate EPS growth and capture market share organically and through acquisitions as the hiring environment rebounds.

Robert Half Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Robert Half's revenue will grow by 1.9% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.2% today to 5.3% in 3 years time.
• Analysts expect earnings to reach $313.2 million (and earnings per share of $3.04) by about September 2028, up from $178.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $276.5 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.3x on those 2028 earnings, down from 20.1x today. This future PE is lower than the current PE for the US Professional Services industry at 26.3x.
• Analysts expect the number of shares outstanding to decline by 1.49% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.11%, as per the Simply Wall St company report.

Robert Half Future Earnings Per Share Growth

Risks

• Persistent declines in revenues (down 7% YoY in Q2 2025; Talent Solutions revenues down 11% YoY; flat to declining Protiviti revenues projected), along with cautious third-quarter guidance (8% lower YoY at midpoint) indicate ongoing difficulty in regaining growth momentum, risking prolonged revenue stagnation or contraction.
  
• Increased SG&A costs as a percentage of revenue (Total SG&A up to 37.1% from 34% a year ago; Talent Solutions SG&A at 49.2% vs. 43.1% YoY), coupled with contracting gross margins, suggest rising operating costs and margin compression, which threaten future net margins and earnings.
  
• The company is experiencing volatility and sharper declines in permanent placement and administrative/customer support business lines, which may signal overdependence on legacy service offerings vulnerable to automation and secular shifts, posing ongoing risks to sustainable revenue.
  
• Ongoing economic uncertainty, extended client decision cycles, and subdued hiring activity are prolonging weak demand, with the lack of a strong rebound in business confidence and hiring rates making a near-term recovery to historical growth rates uncertain, and potentially impacting both top-line growth and earnings.
  
• Despite claims of resilience, Protiviti's slower growth, smaller project sizes, and completion of large contracts-especially as Big 4 competition remains steady-may indicate difficulties scaling higher-value consulting services and a risk that Robert Half will struggle to keep pace with more technology-first or digitally native rivals over the longer term, which could pressure future revenue, margin, and competitive positioning.

Valuation

• The analysts have a consensus price target of $43.667 for Robert Half based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $55.0, and the most bearish reporting a price target of just $33.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $5.9 billion, earnings will come to $313.2 million, and it would be trading on a PE ratio of 16.3x, assuming you use a discount rate of 7.1%.
• Given the current share price of $35.85, the analyst price target of $43.67 is 17.9% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.