Q3 Earnings Preview for Insperity (NYSE:NSP)

in EARNINGS/INVESTING IDEAS by

Insperity, Inc. (NYSE:NSP) is scheduled to report Q3 earnings results before markets open for trading on November 2, 2020.

The company is expected to report earnings of $0.46/share on revenue of $980.1 million. The consensus earnings per share (EPS) of $0.46/share is based on a poll of 4 analysts and represents a decline in eps of −39.3% over the same quarter last year, when the company reported earnings of $0.75/share.

The revenue forecast of $980.1 million based on a poll of 4 analysts implies a year-over-year (YoY) decline in revenue of −6.1%. Last year the company reported $1.043 billion in revenue for the quarter.

Expected to report EPS contraction of −39.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $980.10 $1,043.39 −6.1%
EPS $0.46 $0.75 −39.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

What are your expectations from Insperity, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.09 $1.54 41.3% Beat
Q1, 2020 $1.57 $1.70 8.3% Beat
Q4, 2019 $0.55 $0.57 3.2% Beat
Q3, 2019 $1.01 $0.75 −25.9% Missed
Q2, 2019 $0.83 $0.83 0% Met
Q1, 2019 $1.88 $1.98 5.5% Beat
Q4, 2018 $0.65 $0.69 6.6% Beat
Q3, 2018 $0.82 $0.96 17.1% 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 3.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $66.86 $69.44 3.9% Increase
May 4, 2020 $47.08 $53 12.6% Increase
February 11, 2020 $86.45 $71.64 −17.1% Decline
November 4, 2019 $107.67 $70.84 −34.2% Decline

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 −2.74, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.74 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Insperity, Inc. is currently trading at $75.43/share, down −1.8% for the day. The company is trading at approximately 70.0% of its 52-week high of $107.69/share. The company’s stock price is up 8.6% since the last earnings report and up 1.8% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 67.06 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:NSP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 18.42 and a forward P/E multiple of 19.50.

Insperity, Inc.’s current share price also implies a price-to-book (P/B) multiple of 65.57. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $75.43
P/E Ratio 18.4x
P/E Ratio (Fwd) 19.5x
PEG Ratio 14.8
Total Debt / Total Capital 12.6%
Levered Free Cash Flow $169 million
EV / EBITDA 11.8x

Finbox

Insperity, Inc. is a mid-cap stock with a market capitalization of $2.927 billion and a total enterprise value of $2.866 billion. The company operates in the Industrials sector and the Professional Services industry.

Insperity, Inc. provides human resources (HR) and business solutions to improve business performance for small and medium-sized businesses. The company offers its HR services through its Workforce Optimization and Workforce Synchronization solutions, which include a range of human resources functions, such as payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services. It also provides Insperity Premier, a cloud-based human capital management platform that offers professional employer organization HR outsourcing solutions to its clients; various personnel management services; and employer liability management services, as well as solutions for middle market. In addition, the company offers MarketPlace, an e-commerce portal that offers a range of products and services; and Workforce Acceleration, a human capital management and payroll services solution; time and attendance; performance management; organizational planning; recruiting; employment screening; expense management; retirement; and insurance services. The company operates through 82 offices in the United States. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in March 2011. Insperity, Inc. was founded in 1986 and is headquartered in Kingwood, Texas.

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