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Bear of the Day: ASGN Inc (ASGN)

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ASGN Inc. (ASGN - Free Report) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today.  Let's a take a look at why this stock has the lowest Zacks Rank and if there is any light at the end of the tunnel.

Description

ASGN Incorporated provides IT and professional services primarily in the technology, creative/digital, engineering, life sciences and government sectors. ASGN Incorporated, formerly known as On Assignment Inc., is based California, United States.

Earnings History

The earnings history isn't that bad here with two beats and two misses.  The earnings history really only plays a small role in how the Zacks Rank is determined.  I have seen much worse from stocks that are Zacks Rank #1 (Strong Buy).

Estimate Revisions

The single biggest factor in the Zacks Rank is the movement in earnings estimates. When estimates come down, the Zack Rank is likely to fall as well.  I see the 2020 Zacks Consensus Estimate sliding from $5.05 to $2.91.

Next year shows more of the same with the 2021 Zacks Consensus Estimate dropping from $5.48 to $3.71 over the last 60 days.

This is the major reason the stock is now a Zacks Rank #5 (Strong Sell).

Valuation

With the stock falling so much in the last few months the valuation has really come down as well.  The forward PE of 12x is pretty good considering the company posted growth of 10% on an annual basis in the most recent quarter.  Price to book of 1.4x is pretty good and i would like to see the price to sales at over above 1x and ASGN has a 0.5x multiple.

Chart

 

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