Value
5.9/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 4.6 |
| PEG | 4.9 |
- ▸PEG: 1.58
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.
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VerdictSELL
Overall score4.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The quality composite score of 2.2 sits below the engine's 4.0 floor, triggering an action note to exit the position. Warnings | Quality score should recover to at least 4.0 over the next 12 months for the position to be re-considered viable. | →Stable |
| CounterThe score is weighed down mainly by weak margins rather than balance sheet risk, given a current ratio of 5.8 and moat score of 4.0, so it could recover faster than a structurally impaired business. | ||
The stock is overbought with an RSI of 70, rising on-balance volume, and trading above its 200-day moving average. Momentum breakdown | RSI should stay above 50 and on-balance volume should keep rising over the next 12 months if the momentum is durable rather than a short squeeze. | →Stable |
| CounterAn RSI of 70 combined with an extreme prior gap down suggests the move may be a sharp reflexive bounce rather than a sustainable uptrend. | ||
The V9 expert panel flagged the asymmetry indicator as upside-exhausted, with modeled upside at 0.0%, driving an avoid position-sizing recommendation. Gates warning | Modeled upside should rise above 10% over the next 12 months for the asymmetry warning to clear. | →Stable |
| CounterThe passed momentum gate at 7.4 shows the stock rallying hard already, which could push modeled upside higher quickly once the engine recalculates targets. | ||
The engine classifies the stock as speculative due to an 82% drawdown from its 52-week high, more than 40% off that high. Suitability rationale | The drawdown from the 52-week high should narrow to less than 40% over the next 12 months if the recovery is durable. | →Stable |
| CounterAn 82% drawdown this severe often signals a structurally impaired business (e.g., a spinoff share class trading at a steep discount) rather than a temporary dislocation. | ||
The dividend payout ratio stands at 136% of earnings, flagged in the catalyst data as a sustainability concern. Catalyst breakdown | The dividend payout ratio should fall back below 100% of earnings over the next 12 months if the payout is sustainable. | →Stable |
| CounterA payout ratio above 100% can persist for extended periods if supported by free cash flow rather than reported earnings alone. | ||
The quality composite score of 2.2 sits below the engine's 4.0 floor, triggering an action note to exit the position.
→StableWarnings
- Expectation
- Quality score should recover to at least 4.0 over the next 12 months for the position to be re-considered viable.
CounterThe score is weighed down mainly by weak margins rather than balance sheet risk, given a current ratio of 5.8 and moat score of 4.0, so it could recover faster than a structurally impaired business.
The stock is overbought with an RSI of 70, rising on-balance volume, and trading above its 200-day moving average.
→StableMomentum breakdown
- Expectation
- RSI should stay above 50 and on-balance volume should keep rising over the next 12 months if the momentum is durable rather than a short squeeze.
CounterAn RSI of 70 combined with an extreme prior gap down suggests the move may be a sharp reflexive bounce rather than a sustainable uptrend.
The V9 expert panel flagged the asymmetry indicator as upside-exhausted, with modeled upside at 0.0%, driving an avoid position-sizing recommendation.
→StableGates warning
- Expectation
- Modeled upside should rise above 10% over the next 12 months for the asymmetry warning to clear.
CounterThe passed momentum gate at 7.4 shows the stock rallying hard already, which could push modeled upside higher quickly once the engine recalculates targets.
The engine classifies the stock as speculative due to an 82% drawdown from its 52-week high, more than 40% off that high.
→StableSuitability rationale
- Expectation
- The drawdown from the 52-week high should narrow to less than 40% over the next 12 months if the recovery is durable.
CounterAn 82% drawdown this severe often signals a structurally impaired business (e.g., a spinoff share class trading at a steep discount) rather than a temporary dislocation.
The dividend payout ratio stands at 136% of earnings, flagged in the catalyst data as a sustainability concern.
→StableCatalyst breakdown
- Expectation
- The dividend payout ratio should fall back below 100% of earnings over the next 12 months if the payout is sustainable.
CounterA payout ratio above 100% can persist for extended periods if supported by free cash flow rather than reported earnings alone.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Kelly Services (Class B) shows strong momentum with an overbought RSI and rising volume, but sits classified as speculative after an 82% drawdown from its 52-week high, with quality below the engine's floor and upside described as exhausted by the asymmetry gate.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.6 |
| Gross margin | 0.0 |
| Op margin | 0.2 |
| Net margin | 0.0 |
| Current ratio | 5.8 |
| Moat | 4.0 |
| Piotroski F | 6.7 |
- ▸No competitive moat
- ▸Quality concerns
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -11%
Momentum
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 10.0 |
| vol acceleration | 10.0 |
- ▸Overbought (RSI 75)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
- ▸Volume surge (3.1x avg) on up move
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
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 0.6 |
| growth rank | 0.0 |
Technical
0.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.5 |
| 52w position | 0.0 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.7 |
| days to cover | 10.0 |
| volatility | 0.0 |
| beta | 8.0 |
| debt equity | 9.2 |
Catalyst
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| dividend safety | 5.5 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:8.9>=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 -81% (>40% off 52w high)
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Momentum at 8.9 could not lift the engine output above the verdict floor.
The strongest dimensions are Momentum at 8.9, Risk (lower is worse) at 7.4, and Value at 5.9; the weakest are Growth at 0.0, Technical at 0.2, and Quality at 2.2. 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.
- P1Quality Below Floor
Trip ifQuality score falls below 1.5, further below the 4.0 floor.
- P2Overbought Momentum Extended
Trip ifRSI falls below 50 from the current overbought reading of 70.
- P3Exhausted Upside Asymmetry
Trip ifModeled asymmetry upside stays at 0% for 2 more consecutive quarters without rising above 5%.
- P4Speculative Drawdown Classification
Trip ifPrice falls more than 90% off the 52-week high, worse than the current -82% drawdown.
- P5Rich Dividend Payout Risk
Trip ifDividend payout ratio exceeds 150% of earnings, up from the current 136%.