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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2788
Positioning
Market Dominance
Services
Business Services
$463M
Peter W. Quigley
Kelly Services, Inc. provides workforce solutions to various industries. The company operates through five segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. The Education segment provides staffing and executive search services to early childhood, and higher education markets.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = KELYA ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | 21.3% | 18.6% | 64.5% | 35.7% | 39.5% | 6.5% | 0.0% | 0.0x | $644M | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | 15.4% | 12.6% | 38.7% | 17.1% | 17.0% | -39.7% | 0.0% | 0.0x | $439M | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 28.1% | 16.8% | 48.1% | 23.8% | 18.5% | 78.6% | 0.0% | 37.0x | $220M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | 12.4% | 2.9% | 100.0% | 28.2% | 26.2% | 5.5% | 0.8% | 264.0x | $19.4B | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.6% | 7.8% | 43.8% | 7.4% | 5.9% | 31.2% | 0.0% | 0.0x | $857M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 18.0% | 4.6% | 97.3% | 52.2% | 32.7% | -3.4% | 0.0% | 271.0x | $8.0B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | 9.4% | 4.9% | 55.5% | 8.7% | 7.7% | 13.6% | 1.3% | 7.0x | $78.0B | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | 22.1% | 15.6% | 62.5% | 28.1% | 28.7% | -1.0% | 2.8% | 9.0x | $56.6B | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 21.4% | 8.0% | 100.0% | 10.0% | 7.5% | 14.1% | 0.0% | 27.0x | $1.8B | VS | |
$KELYA KELLY SERVICES INC | 45 | 37 | 30 | 47 | - | - | -12.8% | -5.5% | 20.7% | -1.9% | -3.4% | -11.6% | 2.3% | 10.0x | $463M | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.3% | 1.9% | 59.6% | 3.5% | 2.3% | 7.8% | 0.0% | 0.3x | - | REF |
KELLY SERVICES INC (KELYA) receives a "Reduce" rating with a composite score of 45.1/100. It ranks #2788 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Peter W. Quigley
Chief Executive Officer
Labor Force
7,500
37
34
73
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for KELYA
In-line with peers — no strong momentum signal
Expensive relative to fundamentals — limited margin of safety
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for KELYA.
View All RatingsMaterial decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 37 | 27 | +10ALPHA |
| MOMENTUM | 47 | 45 | +2NEUTRAL |
| VALUATION | 30 | 22 | +8ALPHA |
| INVESTMENT | 34 | 50 | -16DRAG |
| STABILITY | 73 | 79 | -6DRAG |
| SHORT INT | 55 | 66 | -11DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC -76.8% vs WACC 9.7% (spread -86.5%)
GM 21% vs sector 60%, OM -2% vs sector 4%
Capital turnover 59.20x
Rev growth -12%, 10yr history
Interest coverage -5.6x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
KELLY SERVICES INC receives a Reduce rating from our analysis, with a composite score of 45.1/100 and 2 out of 5 stars, ranking #2788 out of 7,333 stocks. KELYA's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
KELYA's quality score of 37/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -12.8% (sector avg: 5.3%), gross margins of 20.7% (sector avg: 59.6%), net margins of -3.4% (sector avg: 2.3%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 30/100, KELYA appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/B ratio of 0.35x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
KELLY SERVICES INC's investment score of 34/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -11.6% vs. a sector average of 7.8% and a return on assets of -5.5% (sector: 1.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
KELYA is currently showing below-average momentum at 47/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at -11.6% year-over-year, while a beta of 0.73 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
KELYA shows good financial stability with a score of 73/100. Key stability metrics include a beta of 0.73 and a debt-to-equity ratio of 10.00x (sector avg: 0.3x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 55/100 for KELYA suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 10.00x), small-cap liquidity risk. With a $463M market cap (small-cap), KELLY SERVICES INC may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
KELYA pays a solid dividend yield of 2.3%, contributing an income component to total returns. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
KELLY SERVICES INC is a small-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #2788 of 7,333 overall (62nd percentile). Key comparisons include ROE of -12.8% trailing the 5.3% sector median and operating margins of -1.9% below the 3.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While KELYA currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Value (30) would have the largest impact on the composite score.
ROE 340% BELOW SECTOR MEDIAN
Gross Margin 65% BELOW SECTOR MEDIAN
Op. Margin 155% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 28, 2025 (Q2 FY2025)
We rate KELLY SERVICES INC (KELYA) as a Reduce with a composite score of 45.1/100 at a current price of $9.36. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (73th percentile) and momentum (47th percentile), which together account for the majority of the composite score. Offsetting weakness in value (30th percentile) and investment (34th percentile) tempers our overall conviction. We assign a No Moat rating (30/100), Medium uncertainty, and Poor capital allocation.
Key items to watch: the path to profitability; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
KELLY SERVICES INC holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 45.1/100 places it at rank #2788 in our full 7,333-stock universe. At $463M in market capitalization, KELLY SERVICES INC is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -12% combined with momentum at the 47th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 21% (-38.9pp vs sector) narrow to operating margins of -2% (-5.4pp vs sector) and net margins of -3.4%, yielding a gross-to-net conversion rate of -17%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $9.36, KELLY SERVICES INC is trading at a premium to fundamental value. Our value factor score of 30/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.
The stock currently trades at P/B of 0.3x, P/S of 0.1x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
A conservative balance sheet (10% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
A 2.28% dividend yield provides income while you wait, and dividends historically account for a significant portion of total equity returns.
The Reduce rating (composite 45.1/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Revenue decline of -12% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Thin net margins of -3.4% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
We assign a Medium uncertainty rating to KELLY SERVICES INC. The stock presents a balanced risk profile: current negative profitability (net margin -3.4%). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: current negative profitability (net margin -3.4%). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 73th percentile and quality factor at the 37th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: conservative leverage (10% D/E) limits balance sheet risk; above-average stability (73th percentile) suggests predictable business dynamics; a 2.28% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate KELLY SERVICES INC's capital allocation as Poor. Key concerns include low returns on equity (-12.8%), negative profitability, weak asset returns (ROA -5.5%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — KELLY SERVICES INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, KELLY SERVICES INC receives a Reduce rating with a composite score of 45.1/100 (rank #2788 of 7,333). Our quantitative framework assigns a No Moat (30/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 44/100.
Our analysis does not support a constructive view on KELLY SERVICES INC at this time. The combination of limited competitive advantages, medium uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign KELLY SERVICES INC a meaningful economic moat, scoring 30/100 on our composite assessment. The ROIC-WACC spread of -86.5% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, reinvestment efficiency, reached only 10/20.
The strongest moat sources are reinvestment efficiency (10/20) and financial resilience (9.5/20). Capital turnover 59.20x. Interest coverage -5.6x. These pillars form the core of KELLY SERVICES INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (0/20) and growth durability (2.8/20). ROIC -76.8% vs WACC 9.7% (spread -86.5%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect KELLY SERVICES INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include declining revenues (-12%) that pressure the earnings outlook. The margin cascade from 21% gross to -2% operating to -3.4% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 37th percentile.
The margin profile shows gross margins of 21%, operating margins of -2%, net margins of -3.4%. Return metrics include ROE of -12.8% and ROA of -5.5%. Relative to the Services sector, gross margins are 38.9 percentage points below the sector median of 60%, and ROE of -12.8% compares to a sector median of 5.3%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 10%, a dividend yield of 2.28%, revenue growth of -12%. The sector median D/E is 0%, putting KELLY SERVICES INC at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
Operator: Good morning, and welcome to the Kelly Services, Inc. Fourth Quarter and Full Year Conference Call.
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