Investment Thesis
ManpowerGroup faces severe fundamental deterioration with negative operating cash flow (-$126.3M) and negative free cash flow (-$135.3M), indicating the core staffing business cannot sustain itself. With operating margins at 0.6%, net margins at 0.1%, and net income down 109% YoY, the company has virtually collapsed to break-even profitability while interest coverage of only 1.1x leaves minimal buffer for economic stress.
Strengths
- Moderate leverage with 0.50x debt-to-equity ratio
- Adequate short-term liquidity with 1.12x current ratio
- Maintains $224.9M in cash reserves
- Established market position in staffing services sector
Risks
- Negative operating cash flow of -$126.3M signals core business cannot fund operations
- Interest coverage ratio of 1.1x is critically low with minimal room for economic downturn
- Net income collapsed 109% YoY to near zero; company essentially unprofitable
- Operating margins deteriorated to 0.6% with no pricing power
- Revenue growth stalled at 0.6% YoY with no momentum
- Negative free cash flow of -$135.3M indicates unsustainable cash burn
Key Metrics to Watch
- Operating cash flow trend - must return to positive
- Interest coverage ratio - risk of covenant breach or refinancing stress
- Revenue growth acceleration and gross margin expansion
- Operating margin recovery and path to sustainable profitability
- Cash balance depletion rate given negative FCF
Financial Metrics
Revenue
4.5B
Net Income
2.5M
EPS (Diluted)
$0.05
Free Cash Flow
-135.3M
Total Assets
8.4B
Cash
224.9M
Profitability Ratios
Gross Margin
16.0%
Operating Margin
0.6%
Net Margin
0.1%
ROE
0.1%
ROA
0.0%
FCF Margin
-3.0%
Balance Sheet & Liquidity
Current Ratio
1.12x
Quick Ratio
1.12x
Debt/Equity
0.50x
Debt/Assets
0.0%
Interest Coverage
1.10x
Long-term Debt
1.0B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T06:04:53.667278 |
Data as of: 2026-03-31 |
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