Robert Half International (RHI) short, mcap=$8300m

RHI short pitch:
– Global specialty staffing firm that trades above peers and operates within the cyclical industry.
– Consensus earnings are too optimistic given the FED’s expectation of higher unemployment.
– Pandemic-driven surge from the public sector is already runoff.
– Challenged by a broad-based slowdown in the pace of client hiring, especially among SMBs, a longer sales cycle, and more stringent hiring requirements.
– Cyclical employment pressures, partially driven by FED policies, are likely to intensify.

RHI valuation:

– Relative to peer group, trades at ~20% premium on a EBITDA multiple basis and ~15% premium on a P/E basis.
– In previous cycles the stock bottomed at c. 8x-12x peak EPS.
– At 10x current peak EPS, RHI is worth $60/share.

Exp. gain: 20% to $60/share.

Full write-up (free guest account required):

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