The first-quarter results for Kforce Inc. (NASDAQ:KFRC) were released last week, making it a good time to revisit its performance. Kforce reported in line with analyst predictions, delivering revenues of US$352m and statutory earnings per share of US$0.58, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the five analysts covering Kforce provided consensus estimates of US$1.43b revenue in 2024, which would reflect a discernible 3.2% decline over the past 12 months. Statutory earnings per share are expected to decrease 2.5% to US$2.91 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.46b and earnings per share (EPS) of US$3.13 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the US$69.00 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Kforce analyst has a price target of US$71.00 per share, while the most pessimistic values it at US$66.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kforce is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 4.3% annualised decline to the end of 2024. That is a notable change from historical growth of 4.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kforce is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$69.00, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Kforce going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Kforce's balance sheet, and whether we think Kforce is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.