Robert Half Inc. RHI has gained 62.1% in the past three months as Talent Solutions improves sequentially and cash generation rebounds. The rally leaves investors weighing recovery against a richer valuation.
Near-term earnings expectations remain soft, while 2027 estimates point to a sharper rebound. That gap makes earnings improvement central to whether the current premium can hold.
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Robert Half's Recovery Faces a Valuation Test
Second-quarter revenues fell 2.4% year over year to $1.34 billion, but Talent Solutions revenues declined just 1%. Permanent Placement Talent Solutions rose 2.9% to $118 million, while Talent Solutions delivered a third straight quarter of sequential adjusted revenue growth.
The 2027 estimates are more encouraging. Revenues are projected to increase 4.7% to $5.57 billion and earnings are expected to rise 57.5% to $2 per share, supporting recovery if hiring demand improves.
RHI's Cash Flow and Dividend Offer Support
Free cash flow rebounded to $102 million from negative $121 million in the first quarter, while operating cash flow reached $109 million. Robert Half also paid a quarterly dividend of 59 cents per share, totaling $59 million.
Liquidity provides another cushion. The current ratio was 1.47 at June 30, and the company held $325 million of cash and $821 million of net receivables. It had no cash borrowings under its $100 million revolving credit facility.
Robert Half's Earnings Outlook Still Looks Uneven
The Zacks Consensus Estimate for 2026 earnings is $1.27 per share versus $1.33 in 2025. Revenues are projected to decline 1.2% to $5.32 billion, leaving the current fiscal year without meaningful top-line growth.
The earnings estimate for the current fiscal year has also declined 1.6% over the past four weeks. Until revisions turn more favorable, sequential staffing improvement has not translated into broad earnings momentum.
RHI's Premium Multiple Raises the Hurdle
Robert Half trades at 24.9X forward 12-month consensus earnings, above the staffing sub-industry's 17.6X, the Zacks Business Services sector's 18.0X and its five-year median of 18.8X. That premium requires stronger operating progress to become easier to defend.
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Peer results show an uneven staffing backdrop. Kelly Services, Inc. KELYA reported second-quarter 2026 revenue down 5.8% year over year but cited improving underlying trends. Korn Ferry KFY posted 7% year-over-year fee revenue growth in its fiscal fourth quarter, underscoring that recovery is not uniform across the group.
Robert Half's Risk Profile Limits Conviction
Clients remain cautious, and Contract Talent Solutions hours worked fell 2.8% year over year in the second quarter. Revenue per employee declined 4%, 7% and 6.5% in 2023, 2024 and 2025, respectively, while limited long-term contracts constrain visibility.
Competition adds another execution test. First-half 2026 capitalized expenditures totaled $32 million, with about 78% directed to software and technology infrastructure. Management expects 2026 capitalized expenditures of $50 million to $70 million, making disciplined returns on those investments important.
Robert Half's Ratings Favor Selectivity
Robert Half's improving cash generation and early staffing recovery are offset by soft 2026 estimates and a valuation premium. For investors weighing whether to buy, hold or wait, the current setup favors selectivity until earnings momentum becomes clearer.
The stock currently carries a Zacks Rank #4 (Sell), which reflects unfavorable near-term earnings estimate revisions.
Its Value Score of B is the most constructive reading, signaling a relatively favorable value profile within the Zacks framework.
The Growth Score of C, Momentum Score of F and VGM Score of C provide less support, particularly on timing. The 2027 outlook still points to recovery potential, but the ratings favor waiting for broader confirmation rather than relying on valuation or cash flow alone.
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