As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the professional staffing & hr solutions industry, including Korn Ferry (NYSE: KFY) and its peers.

The Professional Staffing & HR Solutions subsector within Business Services is set to benefit from evolving workforce trends, including the rise of remote work and the gig economy. With companies casting a wider net to find talent due to remote work, the expertise of staffing and recruiting companies is even more valuable. For those who invest wisely, the use of predictive AI in recruitment and screening as well as automation in HR workflows can enhance efficiency and scalability. On the other hand, digitization means that talent discovery is less of a manual process, opening the door for tech-first platforms. Additionally, regulatory scrutiny around data privacy in HR is evolving and may require companies in this sector to change their go-to-market strategies over time.

The 8 professional staffing & hr solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.1% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 16.9% since the latest earnings results.

Korn Ferry (NYSE: KFY)

With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.

Korn Ferry reported revenues of $715.5 million, up 4.8% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ revenue estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

“I am pleased with our company’s performance. When looking at our results over the last few quarters—even amid all of the choppiness that has encircled the labor and economic environment—it’s clear that our strategy is working,” said Gary D. Burnison, CEO, Korn Ferry.

Unsurprisingly, the stock is down 2.7% since reporting and currently trades at $70.62.

Is now the time to buy Korn Ferry? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: First Advantage (NASDAQ: FA)

Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ: FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.

First Advantage reported revenues of $390.6 million, up 112% year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

First Advantage delivered the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.2% since reporting. It currently trades at $15.06.

Is now the time to buy First Advantage? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q2: Insperity (NYSE: NSP)

Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE: NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.

Insperity reported revenues of $1.66 billion, up 3.3% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.

Insperity delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 18.7% since the results and currently trades at $48.47.

Read our full analysis of Insperity’s results here.

Alight (NYSE: ALIT)

Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE: ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.

Alight reported revenues of $528 million, down 1.9% year on year. This print beat analysts’ expectations by 0.6%. Taking a step back, it was a slower quarter as it logged EPS in line with analysts’ estimates and full-year revenue guidance missing analysts’ expectations.

Alight had the weakest full-year guidance update among its peers. The stock is down 37% since reporting and currently trades at $3.24.

Read our full, actionable report on Alight here, it’s free for active Edge members.

Barrett (NASDAQ: BBSI)

Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ: BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.

Barrett reported revenues of $307.7 million, up 10% year on year. This result surpassed analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is flat since reporting and currently trades at $44.55.

Read our full, actionable report on Barrett here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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