Is Kelly Services, Inc. overvalued or undervalued?

As of 13 February 2025, the valuation grade for Kelly Services, Inc. has moved from fair to risky, indicating a shift towards a more negative outlook. The company appears to be overvalued based on its current metrics, with a P/E ratio of 6, a Price to Book Value of 0.34, and an EV to EBITDA of 4.38, all of which suggest that the stock may not be justified at its current price level. In comparison, AMN Healthcare Services, Inc. has a significantly higher P/E ratio of 20.16, while Kforce, Inc. stands out with an attractive P/E of 49.41, highlighting the disparity in valuation within the sector.
Furthermore, Kelly Services has underperformed relative to the S&P 500, with a 1-year return of -32.71% compared to the index's 17.14%. This trend continues over longer periods, with a 5-year return of -18.34% against the S&P 500's impressive 96.61%, reinforcing the notion that the stock may be overvalued in the current market environment.