ASGN (NYSE:ASGN) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

ASGN Incorporated (NYSE:ASGN) is scheduled to report Q3 earnings results on October 28, 2020.

The company is expected to report earnings of $1.11/share on revenue of $933.6 million. The consensus earnings per share (EPS) of $1.11/share is based on a poll of 8 analysts and represents a decline in eps of −15.5% over the same quarter last year, when the company reported earnings of $1.31/share.

The revenue forecast of $933.6 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −6.9%. Last year the company reported $1.003 billion in revenue for the quarter.

Expected to report EPS contraction of −15.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $933.62 $1,002.70 −6.9%
EPS $1.11 $1.31 −15.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from ASGN Incorporated for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.84 $1.17 39.1% Beat
Q1, 2020 $0.84 $1.08 27.8% Beat
Q4, 2019 $1.23 $1.28 3.9% Beat
Q3, 2019 $1.23 $1.31 6.2% Beat
Q2, 2019 $1.19 $1.10 −7.5% Missed
Q1, 2019 $0.95 $0.93 −2.5% Missed
Q4, 2018 $1.15 $1.14 −0.7% Missed
Q3, 2018 $1.10 $1.30 18.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 5.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $66.46 $70.39 5.9% Increase
April 30, 2020 $47.99 $53.04 10.5% Increase
February 12, 2020 $68.22 $64.71 −5.1% Decline
October 23, 2019 $60.76 $63.07 3.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.81, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.81 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

ASGN Incorporated is currently trading at $68.52/share, down −2.6% for the day. The company is trading at approximately 91.5% of its 52-week high of $74.84/share. The company’s stock price is down −2.7% since the last earnings report and down −1.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.42 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ASGN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 18.99 and a forward P/E multiple of 15.67.

ASGN Incorporated’s current share price also implies a price-to-book (P/B) multiple of 2.47. The following table summarizes some other key fundamental ratios:

Data as of October 26, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $68.52
P/E Ratio 19.0x
P/E Ratio (Fwd) 15.7x
PEG Ratio 2.0
Total Debt / Total Capital 23.4%
Levered Free Cash Flow $383.5 million
EV / EBITDA 11.0x

Finbox

ASGN Incorporated is a mid-cap stock with a market capitalization of $3.597 billion and a total enterprise value of $4.519 billion. The company operates in the Industrials sector and the Professional Services industry.

ASGN Incorporated provides professional staffing and IT solutions in the technology, digital, creative, engineering and life sciences fields across commercial and government sectors in the United States and internationally. The company operates through Apex, Oxford, and ECS segments. The Apex segment offers technology, digital, creative, scientific, and engineering professionals for contract, contract-to-hire, and permanent placement positions to Fortune 1000 and mid-market clients. The Oxford segment provides hard-to-find technology, digital, engineering, and life sciences staffing and consulting services in various skill and geographic markets. The ECS Segment delivers advanced solutions in cloud, cyber security, artificial intelligence, machine learning, application and IT modernization, and science and engineering. The company was formerly known as On Assignment, Inc. and changed its name to ASGN Incorporated in April 2018. ASGN Incorporated was founded in 1985 and is headquartered in Glen Allen, Virginia.

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