It has been about a month since the last earnings report for Insperity, Inc. (NSP Quick QuoteNSP - Free Report) . Shares have added about 4.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Insperity, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Insperity Q1 Earnings and Revenues Surpass Estimates

Insperity reported better-than-expected first-quarter 2021 results.

Adjusted earnings of $1.82 per share beat the consensus mark by 16.7% and increased 7.1% year over year. The reported figure lies above the guidance of $1.37 - $1.72.

Revenues of $1.29 billion surpassed the Zacks Consensus Estimate by 6.5% and increased 4.7% year over year. The upside was backed by 7% increase in revenues per worksite employees (WSEEs), partially offset by an expected 2% decline in the average number of paid WSEEs.

The average number of worksite employees paid per month of 233,170 inched down 2%.

Operating Results        

Gross profit of $251.45 million increased 7.4% from the year-ago quarter. Gross margin of 19.5% improved from 19% in the year-ago quarter. Gross profit per worksite employee per month increased 9.5% year over year to $359.

Adjusted EBITDA inched up 2.9% year over year to $104.24 million. Adjusted EBITDA per worksite employee per month increased 4.9% to $149.

Operating expenses increased 12.6% year over year to $167.62 million. Operating expenses per worksite employee per month increased 15.4% to $240.

Operating income decreased 1.6% year over year to $83.82 million. Operating income per worksite employee per month grew 0.8% to $120.

Balance Sheet & Cash Flow

Insperity exited first-quarter 2021 with adjusted cash, cash equivalents and marketable securities of $196.65 million compared with $212.05 million at the end of the prior quarter. Long-term debt amounted to $369.40 million, flat sequentially.

During the reported quarter, the company repurchased 340,000 shares for $29.7 million and paid out $15.5 million in cash dividends. Capital expenditures totaled $12.1 million.

Q2 Guidance

For second-quarter 2021, Insperity projects adjusted earnings in the range of 60-70 cents per share. 

Adjusted EBITDA is anticipated between $44 million and $49 million. Average WSEEs are expected in the range of 239,300-241,600.

2021 Guidance

Insperity raised its guidance for 2021.

The company now projects adjusted earnings in the band of $3.83-$4.40 per share compared with the prior guidance of $3.27-$4.20.

Adjusted EBITDA is now anticipated in the range of $250-$280 million compared with the prior guidance of $225-$275 million.

Average WSEEs are expected in the range of 243,600-248,300 compared with the prior guidance of 238,900-248,300.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -32.12% due to these changes.

VGM Scores

Currently, Insperity, Inc. has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Insperity, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.