It has been about a month since the last earnings report for Insperity, Inc. (NSP Quick QuoteNSP - Free Report) . Shares have lost about 6.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Insperity, Inc. due for a breakout? 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 catalysts.

Insperity Q3 Earnings and Revenues Surpass Estimates

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

Adjusted earnings of 89 cents per share beat the Zacks Consensus Estimate by 6% but decreased 2.2% year over year. The reported figure lies within the guidance of 74-93 cents.

Revenues of $1.21 billion surpassed the consensus mark by 3.5% and increased 20% year over year. The upside was backed by 8% increase in revenues per worksite employees (WSEEs) and 11% increase in paid worksite employees.

The average number of worksite employees paid per month, 257,560, inched up 11.1% year over year.

Operating Results       

Gross profit of $198.5 million increased 7.3% from the year-ago quarter. Gross margin of 16.4% declined from 18.4% in the year-ago quarter. Gross profit per worksite employee per month decreased 3.4% year over year to $257.

Adjusted EBITDA increased 4.5% year over year to $60.1 million. Adjusted EBITDA per worksite employee per month decreased 6% to $78.

Operating expenses increased 1.7% year over year to $158.9 million. Operating expenses per worksite employee per month decreased 8.4% to $206.

Operating income increased 37.6% year over year to $39.6 million. Operating income per worksite employee per month grew 24.4% to $51.

Balance Sheet & Cash Flow

Insperity exited third-quarter 2021 with adjusted cash, cash equivalents and marketable securities of $227.57 million compared with $212.84 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 shares worth $11.3 million and paid out $17.4 million in cash dividends. Capital expenditures totaled $2.9 million.

Q4 Guidance

For fourth-quarter 2021, Insperity projects adjusted earnings in the range of 61-81 cents per share. Adjusted EBITDA is anticipated between $45 million and $56 million. Average WSEEs are expected in the range of 265,500-268,000.

2021 Guidance

Insperity has updated its guidance for 2021. The company now projects adjusted earnings in the band of $4.25-$4.46 per share compared with the prior guidance of $4.00-$4.59. Adjusted EBITDA is now anticipated in the range of $271-$282 million compared with the prior guidance of $258-$288 million. Average WSEEs are expected in the range of 250,100-250,600 compared with the prior guidance of 247,100-249,500.

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 -5.98% due to these changes.

VGM Scores

At this time, Insperity, Inc. has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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.