It has been about a month since the last earnings report for Insperity, Inc. (NSP Quick QuoteNSP - Free Report) . Shares have lost about 0.4% in that time frame, outperforming 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 drivers.

Insperity Surpasses Q2 Earnings & Revenues Estimates

Insperity reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings (excluding 29 cents from non-recurring items) of $1.16 per share outpaced the Zacks Consensus Estimate by 17.2% and rose 27.5% year over year.  

Revenues of $1.43 billion surpassed the consensus mark by 2.2% and increased 20.2% year over year. The upside was backed by a 1.2% increase in revenues per worksite employee (WSEE) and a 19.4% increase in paid worksite employees.

The average number of worksite employees paid per month, 290,507, increased 19.4% year over year.

Operating Results 

Gross profit grew 20.2% year over year to $239.9 million. The uptick was backed by the outperformance by paid WSEEs, favorable pricing, higher-than-expected contributions from each of the direct cost programs and traditional employment offerings. Gross profit per worksite employee per month inched up 0.7% year over year to $275.

Adjusted EBITDA increased 25% year over year to $75 million. Adjusted EBITDA per worksite employee per month rose 5% to $86.

Operating expenses increased 16.5% year over year to $191.5 million. Operating expenses per worksite employee per month dipped 2.2% to $220.

Operating income increased 37.3% year over year to $48.4 million. Operating income per worksite employee per month improved 14.6% to $55 million.

Balance Sheet & Cash Flow

Insperity exited second-quarter 2022 with adjusted cash, cash equivalents and marketable securities of $510.9 million compared with $153.18 million at the end of the prior quarter. Long-term debt amounted to $369.40 million, flat sequentially.

During the reported quarter, Insperity repurchased almost 308,000 shares for $56.8 million and paid out $19.9 million in cash dividends. Capital expenditures totaled $4.3 million.

Q3 Guidance

The adjusted EPS guidance for the September quarter is provided between 83 cents and $1.06 per share.

Adjusted EBITDA is anticipated between $59 million and $71 million. Average WSEEs are expected in the range of 301,300-303,900.

2022 Guidance

Insperity now projects adjusted earnings in the band of $4.68-$5.25 per share compared with the prior guidance of $4.31-$5.09. 

Adjusted EBITDA is now anticipated in the range of $305-$335 million compared with the prior guidance of $285-$327 million. Average WSEEs are expected to be 294,600-297,200 compared with the prior guidance of 289,600-294,700.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -12.35% due to these changes.

VGM Scores

At this time, Insperity, Inc. has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, 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 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 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.