Insperity, Inc.(NSP - Free Report) reported better-than-expected fourth-quarter 2020 results. Despite such encouraging results, shares of the company have lost 9.4% since its earnings release.
Adjusted earnings of 49 cents per share beat the consensus mark by 63.3% but decreased 14% year over year. Revenues of $1.06 billion also surpassed the Zacks Consensus Estimate by 0.8% but decreased 1.7% year over year.
The average number of worksite employees paid per month of 239,232 inched up 3% sequentially, driven by worksite employees paid from new sales, client retention and net gains in the company’s client base.
Over the past year, shares of Insperity have gained 10% compared with 15.5% rise of the industry it belongs to.
Operating Results
Gross profit of $167.6 million increased 3.5% from the year-ago quarter. Gross margin of 15.9% improved from 15.1% in the year-ago quarter. Gross profit per worksite employee per month increased 5.4% year over year to $233.
Adjusted EBITDA was down 7.1% year over year to $37.9 million. Adjusted EBITDA margin of 3.5% declined from 3.8% in the year-ago quarter. Adjusted EBITDA per worksite employee per month decreased 5.4% to $53.
Operating expenses increased 19.1% year over year to $159.8 million. Operating expenses per worksite employee per month increased 21.9% to $223.
Operating income decreased 72.2% year over year to $7.71 million. Operating income per worksite employee per month fell 71.1% to $11.
Balance Sheet & Cash Flow
Insperity exited fourth-quarter 2020 with adjusted cash, cash equivalents and marketable securities of $212.06 million compared with $212.7 million at the end of the prior quarter. Long-term debt amounted to $369.40 million, flat sequentially.
During full-year 2020, the company repurchased 1.4 million shares for $99.4 million and paid out $61.9 million in cash dividends. Capital expenditures totaled $98.2 million.
Q1 Guidance
For first-quarter 2021, Insperity projects adjusted earnings in the range of $1.37-$1.72 per share. The current Zacks Consensus Estimate of $1.59 lies within the guided range. Adjusted EBITDA is anticipated between $84 million and $103 million. Average WSEEs is expected in the range of 232,100-234,400.
2021 Guidance
For 2021, the company projects adjusted earnings in the band of $3.27-4.20. The current Zacks Consensus Estimate of $3.86 lies within the guided range. Adjusted EBITDA is anticipated in the range of $225-$275 million. Average WSEEs are expected in the range of 238,900-248,300.
Currently, Insperity carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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Insperity, Inc.(NSP - Free Report) reported better-than-expected fourth-quarter 2020 results. Despite such encouraging results, shares of the company have lost 9.4% since its earnings release.
Adjusted earnings of 49 cents per share beat the consensus mark by 63.3% but decreased 14% year over year. Revenues of $1.06 billion also surpassed the Zacks Consensus Estimate by 0.8% but decreased 1.7% year over year.
The average number of worksite employees paid per month of 239,232 inched up 3% sequentially, driven by worksite employees paid from new sales, client retention and net gains in the company’s client base.
Over the past year, shares of Insperity have gained 10% compared with 15.5% rise of the industry it belongs to.
Operating Results
Gross profit of $167.6 million increased 3.5% from the year-ago quarter. Gross margin of 15.9% improved from 15.1% in the year-ago quarter. Gross profit per worksite employee per month increased 5.4% year over year to $233.
Adjusted EBITDA was down 7.1% year over year to $37.9 million. Adjusted EBITDA margin of 3.5% declined from 3.8% in the year-ago quarter. Adjusted EBITDA per worksite employee per month decreased 5.4% to $53.
Operating expenses increased 19.1% year over year to $159.8 million. Operating expenses per worksite employee per month increased 21.9% to $223.
Operating income decreased 72.2% year over year to $7.71 million. Operating income per worksite employee per month fell 71.1% to $11.
Balance Sheet & Cash Flow
Insperity exited fourth-quarter 2020 with adjusted cash, cash equivalents and marketable securities of $212.06 million compared with $212.7 million at the end of the prior quarter. Long-term debt amounted to $369.40 million, flat sequentially.
During full-year 2020, the company repurchased 1.4 million shares for $99.4 million and paid out $61.9 million in cash dividends. Capital expenditures totaled $98.2 million.
Q1 Guidance
For first-quarter 2021, Insperity projects adjusted earnings in the range of $1.37-$1.72 per share. The current Zacks Consensus Estimate of $1.59 lies within the guided range. Adjusted EBITDA is anticipated between $84 million and $103 million. Average WSEEs is expected in the range of 232,100-234,400.
2021 Guidance
For 2021, the company projects adjusted earnings in the band of $3.27-4.20. The current Zacks Consensus Estimate of $3.86 lies within the guided range. Adjusted EBITDA is anticipated in the range of $225-$275 million. Average WSEEs are expected in the range of 238,900-248,300.
Currently, Insperity carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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