MHH reported EPS of $0.11 was $0.01 above our estimate led by greater than expected selling, general and administrative expense reductions.
Total revenue of $41.1 million was down 15.0% year-over-year and below our $45.8 million estimate due primarily to reduced client activity.
Mastech Digital realigned the business into two new reportable segments. Talent (69% of 1Q:26 revenue) and Data & AI (31% of revenue).
On the earnings call, management noted initial progress in client engagement, while highlighting plans to reinvest savings from the efficiency-driven expense reductions into growth-led pursuits supported by both technology and personnel additions through 2026.
We think client demand trends render our prior estimates as somewhat aggressive.
As such, we reduce our EPS estimates to $0.24 (from $0.63) in 2026 and $0.93 (from $1.01) in 2027.
Our free cash flow per share (excluding the add back of stock-based compensation expense) estimates of $0.26 (from $0.67) in 2026 and $0.97 (from $1.05) in 202 imply respective FCF yields of 3.7% and 13.6%.
Our lowered $14 price target is now based on 10x our 2027 EPS estimate of $0.93, plus our year-end 2027 estimated net cash per share of $4.65. Our former $15 price target was based on 10x our previous 2027 EPS estimate of $1.01 plus our prior 2027 yearend 2027 estimated net cash per share of $5.10. On a P/E-only basis, our price target implies a 15.1x multiple to our 2027 estimate, which is consistent with our 5-year EPS CAGR of 15%. Free cash flow and the strong balance sheet support our multiple and moderate risky rating, in our view
Mastech Digital is scheduled to present and host 1x1 meetings at the Sidoti Micro-Cap Virtual Conference on May 20-21.
18 May 2026
Reported 1Q:26 EPS Exceeds Our Estimate On Lower Expenses; Client Demand Trends And Anticipated Growth Investments Drive Our Reduced Estimates; Lower Target To $14 (From $15)
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Reported 1Q:26 EPS Exceeds Our Estimate On Lower Expenses; Client Demand Trends And Anticipated Growth Investments Drive Our Reduced Estimates; Lower Target To $14 (From $15)
MHH reported EPS of $0.11 was $0.01 above our estimate led by greater than expected selling, general and administrative expense reductions.
Total revenue of $41.1 million was down 15.0% year-over-year and below our $45.8 million estimate due primarily to reduced client activity.
Mastech Digital realigned the business into two new reportable segments. Talent (69% of 1Q:26 revenue) and Data & AI (31% of revenue).
On the earnings call, management noted initial progress in client engagement, while highlighting plans to reinvest savings from the efficiency-driven expense reductions into growth-led pursuits supported by both technology and personnel additions through 2026.
We think client demand trends render our prior estimates as somewhat aggressive.
As such, we reduce our EPS estimates to $0.24 (from $0.63) in 2026 and $0.93 (from $1.01) in 2027.
Our free cash flow per share (excluding the add back of stock-based compensation expense) estimates of $0.26 (from $0.67) in 2026 and $0.97 (from $1.05) in 202 imply respective FCF yields of 3.7% and 13.6%.
Our lowered $14 price target is now based on 10x our 2027 EPS estimate of $0.93, plus our year-end 2027 estimated net cash per share of $4.65. Our former $15 price target was based on 10x our previous 2027 EPS estimate of $1.01 plus our prior 2027 yearend 2027 estimated net cash per share of $5.10. On a P/E-only basis, our price target implies a 15.1x multiple to our 2027 estimate, which is consistent with our 5-year EPS CAGR of 15%. Free cash flow and the strong balance sheet support our multiple and moderate risky rating, in our view
Mastech Digital is scheduled to present and host 1x1 meetings at the Sidoti Micro-Cap Virtual Conference on May 20-21.