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Wednesday, DA Davidson reiterated their Buy rating on HireQuest Inc. (NASDAQ: HQI) with a price target of $15.00. The firm’s analyst, Michael Baker, noted HireQuest’s recent move to acquire TrueBlue (NYSE: TBI) through an all-stock deal. Currently trading at $9.25, HireQuest shows strong fundamentals with a 100% gross profit margin and maintains a healthy current ratio of 2.18. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate. This public announcement came after HireQuest’s several attempts to engage with TrueBlue, which, according to filings, were previously turned down.
HireQuest has been a part of DA Davidson’s special situation product, S.T.A.M.P.E.D.E., under the category "Equity/Debt Recaps." The stock has experienced significant pressure, declining 35.42% over the past six months, while operating with a moderate debt level and maintaining strong liquidity. Want deeper insights? InvestingPro offers 13 additional investment tips for HQI, along with comprehensive financial analysis. Following the announcement of the acquisition attempt and TrueBlue’s rejection of the offer, citing undervaluation, DA Davidson has shifted HireQuest’s categorization to "Take-outs."
TrueBlue’s stance on the acquisition proposal is clear; the company believes the offer falls short of their business’s value. This rejection comes despite HireQuest’s efforts to negotiate and bring TrueBlue to the bargaining table.
HireQuest’s strategy, as outlined by DA Davidson, involves looking for opportunities to expand through acquisitions, as demonstrated by their persistent attempts to engage with TrueBlue. The analyst’s commentary suggests that HireQuest’s actions are a significant move within its broader business strategy.
The price target set by DA Davidson indicates their confidence in HireQuest’s potential for growth and value creation. With an EBITDA of $12.61 million in the last twelve months and a strong cash return on invested capital of 20%, the company demonstrates solid operational efficiency. The firm’s categorization of HireQuest in the "Take-outs" section of their S.T.A.M.P.E.D.E. product reflects the potential for mergers and acquisitions to play a role in HireQuest’s future developments. Access the complete HQI Pro Research Report and discover what matters most about this stock through InvestingPro’s comprehensive analysis tools.
In other recent news, HireQuest Inc. reported its Q1 2025 earnings, revealing a mixed performance with earnings per share (EPS) of $0.10, which fell short of the forecasted $0.15. The company’s revenue was $7.5 million, below the anticipated $9.3 million, marking an 11.2% decrease year-over-year. Despite these challenges, HireQuest continues to focus on cost management and strategic capital allocation, with a strong merger and acquisition pipeline. Additionally, HireQuest has made a public offer to acquire TrueBlue for $7.50 per share, representing a 61% premium over TrueBlue’s recent stock price. This proposed acquisition aims to enhance market leadership and growth potential through HireQuest’s franchising model. The offer, structured as an all-stock deal, is contingent upon TrueBlue’s cooperation and approval from its Board and shareholders. HireQuest is prepared to explore alternative transaction structures if necessary, including the potential purchase of TrueBlue’s PeopleReady subsidiary. These developments highlight HireQuest’s strategic focus on growth and expansion in the staffing industry.
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