It's been a good week for Kforce Inc. (NYSE:KFRC) shareholders, because the company has just released its latest third-quarter results, and the shares gained 7.5% to US$58.40. The result was positive overall - although revenues of US$353m were in line with what the analysts predicted, Kforce surprised by delivering a statutory profit of US$0.75 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Kforce

Taking into account the latest results, Kforce's five analysts currently expect revenues in 2025 to be US$1.43b, approximately in line with the last 12 months. Statutory per share are forecast to be US$2.96, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$1.47b and earnings per share (EPS) of US$3.39 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 5.5% to US$65.00, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Kforce at US$71.00 per share, while the most bearish prices it at US$58.00. This is a very narrow spread of estimates, implying either that Kforce is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Kforce's revenue growth is expected to slow, with the forecast 0.4% annualised growth rate until the end of 2025 being well below the historical 3.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.6% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kforce.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Kforce's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Kforce. Long-term earnings power is much more important than next year's profits. We have forecasts for Kforce going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Kforce that you need to be mindful of.

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