The market volatility over the past couple of weeks can’t be ignored. Some FTSE companies have experienced sharp share price falls. For others, the recent negative sentiment has pushed their stock down to potentially undervalued territory. So when I spotted one FTSE 250 stock that’s trading at multi-decade lows, I decided to dig deeper.

Time for a new job

I’m talking about Hays (LSE:HAS). The recruitment company is down 53% over the past year, with 25% of that coming in just the past month.

The company’s core problem is that the hiring market has weakened sharply. Given that its revenue is tightly linked to hiring activity, this isn’t good. As a result, the half-year results released last month showed net fees fell by 9% versus the same period last year. Operating profit was down by 21% in what the CFO described as “a backdrop of continued macroeconomic and political uncertainty”.

Adding to the short-term woes was news that the CEO had suddenly stepped down, along with an 84% cut in the dividend. The dividend news obviously frightened away a lot of income investors. As for the CEO news, it’s not a good look for the future direction of the company if the key leader is changing unexpectedly.

The problems have pushed the stock down to 35p, the lowest level since the early 1990s.

The outlook from here

To begin with, I noted down the current analyst ratings for the company. Of the 11 contributors I can see, the average target price for the coming year is 63p. The highest comes from Citibank, with a forecast of 90p. Interestingly, there are no target prices below 35p. This is a strong indication from experts that the recent fear about the stock is misplaced.

Another fundamental reason why I could consider buying is that the job market is cyclical. Over the decades, it has gone through good times and bad times. Right now is a bad time. But with a long-term investment view, I’m confident the market will improve in the coming years. As the UK economy recovers, with inflation hopefully continuing to fall and interest rates coming lower, it should act to kickstart economic growth. In turn, this should give employers more confidence to go out and hire.

Risks ahead

On the other hand, the stock could fall further before any recovery takes shape. The business needs to find a new CEO, and the immediate forecast is for continued fee revenue decline due to the weak outlook. Therefore, until the company can get back on its feet or can prove some catalyst for growth, I struggle to see why the share price will stop falling.

When I add everything together, I do think it’s a stock that can rally in the long term. However, I’m not convinced that right now is the best time to buy, so I will add it to my watchlist and look to revisit in a month’s time.