It has been about a month since the last earnings report for Insperity, Inc. (NSP Quick QuoteNSP - Free Report) . Shares have lost about 13.3% 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 the most recent earnings report in order to get a better handle on the important drivers.

Insperity Surpasses Q1 Earnings & Revenues Estimates

Insperity reported solid first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of $1.99 per share outpaced the Zacks Consensus Estimate as well as the year-ago quarter figure by 9.3%. The reported figure lies within the guidance of $1.56-$2.12.

Revenues of $1.58 billion surpassed the consensus mark by 6.1% and increased 22.6% year over year. The upside was backed by a 3% increase in revenues per worksite employee (“WSEE”) and 19.5% increase in paid worksite employees.

The average number of worksite employees paid per month, 278,660, inched up 19.5% year over year. WSEEs paid from new client sales grew 37%, backed by strong sale bookings in fourth-quarter 2021.

Operating Results       

Gross profit grew 13.7% year over year to $285.77 million. The uptick was backed by the outperformance by paid WSEEs, favorable pricing and gross profit contribution from the company’s direct cost programs. Gross profit per worksite employee per month decreased 4.7% year over year to $342.

Adjusted EBITDA increased 13.8% year over year to $118.57 million. Adjusted EBITDA per worksite employee per month decreased 4.7% to $142.

Operating expenses increased 11.8% year over year to $187.38 million. Operating expenses per worksite employee per month decreased 6.7% to $224.

Operating income increased 17.4% year over year to $98.39 million. Operating income per worksite employee per month decreased 1.7% to $118.

Balance Sheet & Cash Flow

Insperity exited first-quarter 2022 with adjusted cash, cash equivalents and marketable securities of $153.18 million compared with $162.75 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 almost 308,000 shares for $27.4 million and paid out $17.2 million in cash dividends. Capital expenditures totaled $4.7 million.

Q2 Guidance

For second-quarter 2022, Insperity projects adjusted earnings per share between 88 cents and $1.12 per share. Adjusted EBITDA is anticipated between $60 million and $73 million. Average WSEEs are expected in the range of 287,100-289,500.

2022 Guidance

Insperity has raised its guidance for 2022. The company now projects adjusted earnings in the band of $4.31-$5.09 per share compared with the prior guidance of $3.74-$4.86. Adjusted EBITDA is now anticipated in the range of $285-$327 million compared with the prior guidance of $251-$311 million. Average WSEEs are expected to be 289,600-294,700 compared with the prior guidance of 287,100-292,200.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted -14.52% due to these changes.

VGM Scores

Currently, Insperity, Inc. has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 upward 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.