RHI: Strong Downtrend Signals Potential Put Opportunity

Robert Half Inc. provides specialized talent solutions and business consulting services through its 'Robert Half' and 'Protiviti' company names. 'Robert Half' focuses on contract and permanent placement talent solutions across finance and accounting, technology, marketing and creative, legal, and administrative and customer support fields. 'Protiviti' offers consulting services in areas like regulatory compliance, finance, technology, risk, and internal audit. The company targets businesses needing flexible staffing and specialized consulting, ranging from startups to large global corporations. Robert Half differentiates itself through a unified 'Robert Half' brand, leveraging AI to match candidates to jobs, and a 'configure-to-fit' resourcing model that combines consulting professionals and specialized talent to meet client needs.

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RHI exhibits a strongly bearish technical outlook based on the provided data. The stock price has been in a significant downtrend over the past 90 days, plummeting from approximately $42.18 on July 1st to $25.48 as of November 4th. The price is well below its 50-day SMA at $33.37 and 200-day SMA at $44.32, confirming the downtrend. Momentum indicators are overwhelmingly negative. The MACD is deeply negative at -2.04 and the RSI is extremely oversold at 18.39. The ADX is elevated at 45.76, signaling a strong trend, in this case, a strong downtrend. The Stochastic Oscillator is also very low, suggesting oversold conditions, but in a strong downtrend, this can persist. The ROC (Rate of Change) is significantly negative at -25.73, reflecting the severity of the recent price declines. The lower Bollinger Band at 25.38 is close to the current price, suggesting possible short-term support, but overall, the technical indicators point to continued downward pressure.

Robert Half Inc.'s MD&A presents a challenging operational environment. For the three months ended September 30, 2025, 'service revenues' decreased by 7.5% to $1.35 billion, compared to $1.47 billion in the same period last year. The 'gross margin' also declined, from $572 million to $504 million, representing an 11.8% decrease. This was reflected in Protiviti's gross margin as a percentage of revenues which decreased from 24.6% to 20.9%. Looking at the nine-month period, 'service revenues' decreased by 7.6% to $4.08 billion, compared to $4.41 billion. 'Net cash provided by operating activities' was $137 million for the nine months ended September 30, 2025, significantly lower than the $255 million reported for the same period in 2024. The company acknowledges 'client and job seeker caution', which is 'subduing hiring activity and new project starts'. While there are 'early signs of improvement' in the macroeconomic backdrop, the company faces limited visibility into future revenues due to its dependence on macroeconomic and labor market conditions and short client engagements. The company's headcount remained 'relatively flat' during the first three quarters of 2025. Capital expenditures are expected to range from '$75 million to $90 million' for 2025.

Robert Half's Q2 2025 earnings call presents a cautiously optimistic outlook. While global enterprise revenues declined by 7% year-over-year, and net income per share decreased to $0.41 from $0.66, revenues and earnings were 'in line with the midpoint of our previous second quarter guidance.' Management highlighted persistent economic uncertainty that elongated decision cycles, but also noted stabilization in June and into July. The company is guiding for Q3 revenue of $1.31 billion to $1.41 billion, which is 8% lower year-over-year, but expects midpoint adjusted operating income dollars to increase sequentially. Management emphasized that the 'fears of economic recession have eased' and small business confidence has rebounded modestly. Protiviti's revenue growth has moderated, but its pipeline remains strong, with new opportunities up substantially in the last 30 days. Overall, management's tone suggests a cautious optimism, acknowledging current challenges but expressing confidence in the company's long-term positioning and ability to capitalize on future opportunities.

RHI's financial performance presents a somewhat bearish picture. While revenue has fluctuated, the general trend shows a slight decrease from $1,475.9M in Q1 2024 to $1,354.5M in Q3 2025. The gross profit ratio has also seen volatility, starting at 0.372 in Q1 2024, peaking at 0.390 in Q3 2024, and settling at 0.372 in Q3 2025, indicating inconsistent profitability. Operating cash flow, though only available for Q2 2025 at $119.4M, shows positive cash generation for that period, but the prior period, Q1 2025, had negative operating cash flow of -$59.3M. Total debt has remained relatively stable around $240M, with Q3 2025 reflecting no debt. Overall, the inconsistent revenue, volatile profitability, and fluctuating cash flow, coupled with a stable but existing debt load, suggest potential challenges in the near term.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting efficient cost management. Return on Equity (ROE) has shown positive movement, signaling enhanced profitability and efficient use of shareholder equity. The Price-to-Earnings (P/E) ratio, while elevated, might be justifiable given the growth trajectory and positive ROE trend. The Debt-to-Equity ratio shows a slight increase, which warrants monitoring, but is counterbalanced by a healthy Current Ratio, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable picture with growth and profitability, though the leverage should be watched closely. The combination of growth and profitability suggests potential for continued positive performance over the next 12 months.