Download PDF

1. Company Snapshot

1.a. Company Description

Mastech Digital, Inc., together with its subsidiaries, provides digital transformation IT services to large, medium-sized, and small companies in the United States.It operates through two segments, Data and Analytics Services, and IT Staffing Services.The company offers data management and analytics services, including project-based consulting services in the areas of master data management, enterprise data integration, big data and analytics, and digital transformation by using onsite and offshore resources.


It also provides a range of IT staffing services in the areas of data management and analytics, cloud, mobility, social, automation, business intelligence/data warehousing, web services, enterprise resource planning and customer resource management, and e-business solutions.In addition, the company offers digital transformation services, such as digital learning services; and cloud-based enterprise application across sales, marketing, and customer service organizations.It provides its services across various industry verticals, including financial services, government, healthcare, manufacturing, retail, technology, telecommunications, and transportation.


The company was formerly known as Mastech Holdings, Inc.and changed its name to Mastech Digital, Inc.in September 2016.


Mastech Digital, Inc.was founded in 1986 and is headquartered in Pittsburgh, Pennsylvania.

Show Full description

1.b. Last Insights on MHH

Mastech Digital's recent performance was negatively driven by escalating costs and uncertainty around new leadership. The company's Q4 2024 earnings revealed a 10.2% revenue growth, but the Data and Analytics Services Segment's 26.2% growth was offset by rising expenses. The appointment of Nirav Patel as President and CEO, effective January 6, 2025, may bring uncertainty to the company's strategy and direction. Additionally, the company's high executive compensation, including Patel's non-qualified stock options, may weigh on investor sentiment.

1.c. Company Highlights

2. Mastech Digital's Q4 2025 Earnings: Stable Margins Amidst Challenging Market Backdrop

Mastech Digital reported consolidated revenue of $45.5 million in Q4 2025, a 10.4% year-over-year decrease. Despite the decline, the company delivered stable margins driven by stronger pricing discipline and tighter operational controls. GAAP net income was $1 million or $0.08 per diluted share, while non-GAAP net income was $2.5 million or $0.21 per diluted share. The actual EPS came out at $0.29, beating estimates of $0.17. For the full year 2025, consolidated revenue was $191.4 million, a 3.8% year-over-year decrease.

Publication Date: Feb -24

📋 Highlights

Segment Performance

The IT Staffing Services segment revenues declined 7% year-over-year in Q4, while headcount fell 16.7%. However, the company achieved its highest ever average bill rates at $87.32, reflecting their disciplined approach to pricing and emphasis on higher-value engagements. In the Data and Analytics Services segment, revenues declined 24% year-over-year, largely due to backlog reversal from some of their 2024 engagements. As Nirav Patel stated, "growth is paramount for the company" and they plan to focus on industry segments such as health sciences, financial services, and retail and consumer markets.

Outlook and Growth Strategy

The company is well-positioned to help clients move forward with their AI adoption journey. They plan to build core capabilities that will allow them to win in the future and offer a suite of offerings that will help companies achieve their goals. With a strong cash position of $36.5 million and no bank debt outstanding, the company is poised to invest in talent, competency building, and market expansion. Analysts estimate next year's revenue growth at 12.5%.

Valuation and Financial Health

With a P/E Ratio of 125.16 and P/S Ratio of 0.4, the stock appears to be priced for growth. The company's solid operating cash generation and low capital expenditures have driven strong cash flows. The Net Debt / EBITDA ratio of -11.61 indicates a healthy financial position. The ROE of 0.69% suggests that the company is not generating significant returns on equity. The Free Cash Flow Yield of 13.49% is attractive, indicating that the company is generating sufficient cash to potentially return value to shareholders or invest in growth initiatives.

3. NewsRoom

Card image cap

Mastech Digital, Inc. (MHH) Q4 2025 Earnings Call Transcript

Feb -19

Source: seekingalpha.com

Card image cap

Mastech Digital Reports Fourth Quarter and Full-Year 2025 Results

Feb -19

Source: prnewswire.com

Card image cap

Mastech Digital to Report Fourth Quarter and Full-Year 2025 Financial Results on February 19, 2026

Feb -11

Source: prnewswire.com

Card image cap

Mastech Digital, Inc. (MHH) Q3 2025 Earnings Call Transcript

Nov -12

Source: seekingalpha.com

Card image cap

Mastech Digital Reports Third Quarter 2025 Results

Nov -12

Source: prnewswire.com

Card image cap

Mastech Digital to Discuss Third Quarter Financial Results on November 12, 2025

Nov -03

Source: prnewswire.com

Card image cap

Mastech Digital, Inc. (MHH) Q2 2025 Earnings Call Transcript

Aug -13

Source: seekingalpha.com

Card image cap

Mastech Digital Reports 2% Sequential Revenue Growth for the Second Quarter of 2025

Aug -13

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.75%)

6. Segments

IT Staffing Services

Expected Growth: 3.0%

Mastech Digital's 3.0% growth in IT Staffing Services is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity expertise. Additionally, the rise of remote work and talent scarcity in the IT sector contribute to the growth. The company's expertise in providing specialized IT professionals and its strong client relationships also support this growth.

Data and Analytics Services

Expected Growth: 1.5%

Mastech Digital's 1.5x growth in Data and Analytics Services is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and need for data-driven decision making. Additionally, the company's expertise in emerging technologies like AI, ML, and IoT, and its ability to provide end-to-end solutions, are key growth catalysts.

7. Detailed Products

Digital Transformation

Mastech Digital's digital transformation services help organizations navigate the complexities of digital change, from strategy to implementation.

Cloud Services

Mastech Digital's cloud services provide scalable, secure, and efficient cloud solutions to help organizations optimize their IT infrastructure.

Data Analytics

Mastech Digital's data analytics services help organizations make data-driven decisions by providing insights and intelligence from their data.

Cybersecurity

Mastech Digital's cybersecurity services help organizations protect their IT infrastructure and data from cyber threats.

IT Staffing

Mastech Digital's IT staffing services provide skilled IT professionals to help organizations fill talent gaps and meet project deadlines.

8. Mastech Digital, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Mastech Digital, Inc. operates in the IT staffing and consulting services industry, where there are many substitutes available. However, the company's strong brand reputation and long-standing relationships with clients help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Mastech Digital, Inc.'s customers are primarily large enterprises, which have limited bargaining power due to the company's specialized services and expertise.

Bargaining Power Of Suppliers

Mastech Digital, Inc. relies on a network of independent contractors and consultants, which gives them some bargaining power. However, the company's scale and reputation help to mitigate this threat.

Threat Of New Entrants

The IT staffing and consulting services industry has high barriers to entry, including the need for specialized expertise and established relationships with clients. This makes it difficult for new entrants to compete with Mastech Digital, Inc.

Intensity Of Rivalry

The IT staffing and consulting services industry is highly competitive, with many established players competing for market share. Mastech Digital, Inc. must continually innovate and differentiate itself to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.87%
Debt Cost 6.58%
Equity Weight 94.13%
Equity Cost 6.58%
WACC 6.58%
Leverage 6.24%

11. Quality Control: Mastech Digital, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Upwork

A-Score: 5.0/10

Value: 3.9

Growth: 8.6

Quality: 8.2

Yield: 0.0

Momentum: 7.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
HireQuest

A-Score: 4.5/10

Value: 5.3

Growth: 4.4

Quality: 8.4

Yield: 4.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
GEE Group

A-Score: 3.8/10

Value: 10.0

Growth: 3.3

Quality: 3.1

Yield: 0.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Hudson Global

A-Score: 3.3/10

Value: 8.3

Growth: 0.8

Quality: 4.9

Yield: 0.0

Momentum: 0.5

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Mastech Digital

A-Score: 3.1/10

Value: 7.3

Growth: 2.9

Quality: 5.1

Yield: 0.0

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

View Full Report
Stock-Card
ZipRecruiter

A-Score: 3.1/10

Value: 6.0

Growth: 3.6

Quality: 6.2

Yield: 0.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.5$

Current Price

6.5$

Potential

-0.00%

Expected Cash-Flows