Robert Half Inc. (NYSE:RHI) Stock Falls 23.8% in Q2 Amid Economic Uncertainty

Robert Half Inc. (NYSE:RHI) stock fell 23.8% in Q2 and is now a small position for Conventum – Alluvium Global Fund due to a perceived dichotomy between its share price and the general price levels of equities. The fund's valuation is conservative, based on maintainable earnings not much higher than its average over the past 10 years, and trades at a 27% discount to it.

Title: Robert Half Inc. (RHI) Stock Performance and Valuation Analysis

Robert Half Inc. (NYSE: RHI) has seen a significant decline in its stock performance, with a 23.8% drop in the second quarter (Q2) of 2025. This decline has led Conventum – Alluvium Global Fund to reduce its position in the stock, citing a perceived dichotomy between RHI's share price and the broader equity market. The fund's valuation is based on maintainable earnings, which are not much higher than the average over the past decade, and it currently trades at a 27% discount to its valuation.

The core issue for RHI is the slowing labor market, which has led to a decrease in demand for its placement and temporary help services. The Federal Reserve's recent policy of raising rates in response to inflation has contributed to this slowdown. Despite the Fed potentially easing policy, the outlook remains cautious, with analysts expecting modest growth and a stabilization rather than acceleration in the labor market.

In Q2 2025, RHI reported earnings of $0.41 per share, which was a penny ahead of expectations but saw a 7% decline in revenue to $1.37 billion. The company's operating margin was 4.3%, reflecting the impact of a muted recovery in the labor market. The talent solutions segment, which accounts for about 82% of gross profits, saw an 11% decline in revenue, with the United States and overseas markets both reporting declines. The company's balance sheet remains strong, with no debt and $381 million in cash, and its 6.2% dividend yield is considered secure.

Analysts remain bearish on RHI, citing the company's inability to return to pre-pandemic levels of activity and the potential for AI to reduce demand for its services. The fund's conservative valuation and the perceived discount to its maintainable earnings make it cautious about investing in RHI at current levels. While the company may stabilize, a sharp recovery is not expected in the near term.

References
[1] https://seekingalpha.com/article/4817260-robert-half-too-expensive-even-if-results-stabilize