It has been about a month since the last earnings report for Insperity, Inc. (NSP Quick QuoteNSP - Free Report) . Shares have lost about 9.5% 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 catalysts.

Insperity Q1 Earnings Beat Estimates

Insperity, Inc. reported  solid first-quarter 2023 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate.

Insperity’s shares have gained 1.5%  in response to the better-than-expected performance.

Adjusted earnings (excluding 22 cents from non-recurring items) of $2.67 per share outpaced the Zacks Consensus Estimate and our estimate by 7.7% and rose more than 34.2% year over year.

Revenues of $1.77 billion surpassed the Zacks Consensus Estimate by 0.8% and our estimate by 1.7%. Revenues increased 12.2% year over year. The upside was backed by an increase in the paid average number of worksite employees (WSEE).

The average number of WSEEs paid per month was 306,691, which increased 10.1% year over year.  

Shares of Insperity have gained 17% in the past year against its industry’s 18.9% decline.

Operating Results

Gross profit grew 16.2% year over year to $332.1 million. The uptick was backed by a 10.1% increase in paid WSEEs and a 5.6% increase in gross profit per WSEE per month.

Operating expenses increased 12.7% year over year to $211.1 million. Operating expenses per WSEE per month rose 2.2% to $229.

Operating income increased 23% year over year to $121 million. Operating income per WSEE per month improved 11.9% to $132.

Balance Sheet & Cash Flow

Insperity exited first-quarter 2023 with adjusted cash, cash equivalents and marketable securities of $732.1 million, compared with $765.9 million at the end of the prior quarter. Long-term debt amounted to $369.40 million, flat sequentially.

During the reported quarter, NSP repurchased almost 289,000 shares for $35 million and paid out $20 million as cash dividends. Capital expenditures totaled $6.8 million.

Q2 Guidance

Adjusted EBITDA is anticipated to be between $81 million and $90 million. Average WSEEs are expected in the range of 310,800-313,700.

The adjusted earnings per share  guidance for the second quarter is between $1.16 per share and $1.32 per share. 

2023 Guidance

Insperity now projects adjusted earnings in the band of $5.62-$6.39 per share. 

Adjusted EBITDA is now anticipated in the range of $370-$410 million.

Average WSEEs are expected to be 315,600-321,600.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 6.38% due to these changes.

VGM Scores

Currently, Insperity, Inc. has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Insperity, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.