Insperity, Inc. ( NSP Quick Quote NSP - Free Report) has had an impressive run on the bourse over the past year. The stock gained 73.2%, outperforming the 45% rally of the Zacks S&P 500 composite.
The company has an impressive
Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of quality and sustainability of its growth.
Insperity has an expected long-term (three to five years) earnings per share growth rate of 15%.
Factors That Auger Well
Insperity, being an integrated human resources and business solutions provider, offers a comprehensive suite of HR services solutions through professional employer organization (“PEO”) services known as Workforce Optimization and Workforce Synchronization solutions. With the help of these solutions, the company serves small- and medium-sized businesses in selected markets throughout the United States. Apart from PEO services, Insperity is also focusing on its Workforce Administration solution that provides human capital management and payroll services solution. Additional offerings of the company include time and attendance, organizational planning, recruiting services, employment screening, performance management, retirement services, as well as insurance services.
Insperity looks strong on the back of a growing PEO industry which is currently being driven by the growth of small- and medium-sized businesses, increased need of providing employee benefits, increased costs related to workers’ compensation insurance coverage, workplace safety programs, employee-related complaints and litigation, and others.
Insperity exited the March quarter with cash and equivalents of $575 million, which is above the total debt of $369 million. This indicates that the company has sufficient cash to meet its debt obligations. Moreover, Insperity does not have any current debt. Its total-debt-to-total-capital ratio was 0.83 at the end of first-quarter 2021, lower than the previous quarter’s 0.89. Lower debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is declining and so is the risk of insolvency.
Expense Woes Stay
Insperity is seeing an increase in expenses as it continues to invest in growth, technology, and product and service offerings. In first-quarter 2021, operating expenses increased 12.6% year over year to $167.62 million. During 2020, adjusted operating expenses of $612.2 million increased 12.1% year over year. The same rose 10.7% year over year in 2019 and 12% in 2018. Hence, going forward, the bottom line is likely to remain under pressure.
Zacks Rank and Stocks to Consider
Insperity currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks
Business Services sector are Accenture ( ACN Quick Quote ACN - Free Report) , Cross Country Healthcare ( CCRN Quick Quote CCRN - Free Report) and Paychex ( PAYX Quick Quote PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for Accenture, Cross Country Healthcare and Paychex is pegged at 10%, 10.5% and 8%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.+
See these 7 breakthrough stocks now>>