Value
6.4/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 3.2 |
| PEG | 6.3 |
- ▸PEG: 1.17
KELYB · Why this verdict
Why Kelly Services (KELYB) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Kelly Services screens as cheap on earnings multiples with strong price momentum, but weak business quality (1.9/10), shrinking revenue and no competitive moat make it a speculative, avoid-rated position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality is poor at 1.9/10 with no competitive moat, which keeps the stock from qualifying as a durable holding. Quality breakdown | Quality score should recover toward 4.0 as margins and returns on equity improve over 12 months. | →Stable |
| CounterStaffing is a cyclical business; low returns now may simply reflect a cyclical trough, and a labor-market rebound could lift margins quickly. | ||
Revenue is declining about 6% with a growth score of only 0.6/10, so the top line is shrinking rather than compounding. Growth breakdown | Revenue growth should turn flat to positive within 12 months if the thesis of stabilisation is to hold. | →Stable |
| CounterRevenue declines may reflect deliberate exits from low-margin contracts, with profitability improving even as sales shrink. | ||
Valuation scores 7.3/10 with an EV/EBITDA component of 3.6 and a PEG of 0.91, so the shares look inexpensive relative to earnings. Valuation breakdown | Multiples should hold or re-rate upward if earnings stabilise over the next 12 months. | ↓Deteriorating |
| CounterCheap multiples can be a value trap when earnings and quality are deteriorating; low valuation may be warranted. | ||
Momentum is strong at 6.6/10 with rising OBV and price above the 200-day average, but RSI of 85 is overbought after a 79% drawdown from the 52-week high. Momentum breakdown | Price should hold above the 200-day average through the next 12 months without a sharp mean-reversion. | →Stable |
| CounterAn RSI of 85 signals a stretched short-term rally that often retraces, and the stock remains deeply below its prior highs. | ||
The stock is a speculative small cap (about $0.9B) with a 15% default take-profit and a 4.6% downside to its stop, leaving little reward-to-risk edge at $26. Targets | Reward-to-risk should improve above 1.0 only if a clear catalyst or analyst target emerges within 12 months. | ↓Deteriorating |
| CounterSmall-cap size below institutional reach can itself be an opportunity if coverage and ownership expand. | ||
Business quality is poor at 1.9/10 with no competitive moat, which keeps the stock from qualifying as a durable holding.
→StableQuality breakdown
- Expectation
- Quality score should recover toward 4.0 as margins and returns on equity improve over 12 months.
CounterStaffing is a cyclical business; low returns now may simply reflect a cyclical trough, and a labor-market rebound could lift margins quickly.
Revenue is declining about 6% with a growth score of only 0.6/10, so the top line is shrinking rather than compounding.
→StableGrowth breakdown
- Expectation
- Revenue growth should turn flat to positive within 12 months if the thesis of stabilisation is to hold.
CounterRevenue declines may reflect deliberate exits from low-margin contracts, with profitability improving even as sales shrink.
Valuation scores 7.3/10 with an EV/EBITDA component of 3.6 and a PEG of 0.91, so the shares look inexpensive relative to earnings.
↓DeterioratingValuation breakdown
- Expectation
- Multiples should hold or re-rate upward if earnings stabilise over the next 12 months.
CounterCheap multiples can be a value trap when earnings and quality are deteriorating; low valuation may be warranted.
Momentum is strong at 6.6/10 with rising OBV and price above the 200-day average, but RSI of 85 is overbought after a 79% drawdown from the 52-week high.
→StableMomentum breakdown
- Expectation
- Price should hold above the 200-day average through the next 12 months without a sharp mean-reversion.
CounterAn RSI of 85 signals a stretched short-term rally that often retraces, and the stock remains deeply below its prior highs.
The stock is a speculative small cap (about $0.9B) with a 15% default take-profit and a 4.6% downside to its stop, leaving little reward-to-risk edge at $26.
↓DeterioratingTargets
- Expectation
- Reward-to-risk should improve above 1.0 only if a clear catalyst or analyst target emerges within 12 months.
CounterSmall-cap size below institutional reach can itself be an opportunity if coverage and ownership expand.
Per-dimension breakdown
Quality
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.5 |
| Gross margin | 0.0 |
| Op margin | 0.7 |
| Net margin | 0.0 |
| Current ratio | 5.5 |
| Moat | 4.0 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
0.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.1 |
| EPS growth | 0.0 |
- ▸Declining revenue: -6%
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 80)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 0.0 |
| growth rank | 0.0 |
Technical
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 1.7 |
| 52w position | 0.0 |
| gap | 7.0 |
Risk (lower is worse)
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.8 |
| days to cover | 10.0 |
| volatility | 4.4 |
| beta | 7.7 |
| debt equity | 9.5 |
Catalyst
5.9/10data confidence 50%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| dividend safety | 6.8 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -78% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Risk (lower is worse) at 8.3 and asymmetric R:R of 0.00.
The strongest dimensions are Risk (lower is worse) at 8.3, Momentum at 6.6, and Value at 6.4; the weakest are Growth at 0.6, Quality at 1.9, and Technical at 2.5. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Weak Business Quality
Trip ifQuality score stays below 4.0 for 4 consecutive quarters from the current 1.9.
- P2Declining Revenue Trend
Trip ifRevenue growth falls below -6% YoY for 2 consecutive quarters.
- P3Valuation Looks Cheap
Trip ifEV/EBITDA rises above 8x from the current low level without earnings growth.
- P4Overbought Momentum After Drawdown
Trip ifShare price falls below the 200-day moving average for more than 10 trading days.
- P5Limited Upside Small Cap
Trip ifShare price drops to $24.8 or below, the stop-loss level.