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Why Is Insperity (NSP) Up 4.4% Since the Last Earnings Report?

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A month has gone by since the last earnings report for Insperity, Inc. (NSP - Free Report) . Shares have added about 4.4% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? 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 Q4 Earnings Beat, Revenues Miss Estimates

Insperity reported mixed fourth-quarter 2016 numbers with earnings coming ahead of expectations but revenues falling short of the same. Adjusted earnings of $0.45 a share surpassed the Zacks Consensus Estimate of $0.42.

Insperity’s revenues of $729.1 million increased 12.2% on a year-over-year basis but lagged the Zacks Consensus Estimate of $732.7 million. The year-over-year growth was driven by a 13% increase in average paid worksite employees.

Quarter Details

Insperity’s gross margin in the quarter was up 23 basis points (bps) from the year-ago period to 15.16%.

The company’s operating expenses increased 10.4% year over year to $96.1 million. Operating margin was 1.98%, up 44 bps from the year-ago quarter.

Insperity exited the quarter with cash, marketable securities and restricted cash of $330.5 million compared with $316.8 million as on Dec 31, 2015.

Insperity purchased 253K shares worth $17.7 million. For the year, the company spent $197 million towards dividends and buybacks. 

Guidance

Insperity also provided an outlook for the first quarter and full year 2017.

For the first quarter of 2017, Insperity projects adjusted earnings in a range of $1.78 to $1.87 a share. Adjusted EBITDA is projected in a range of $63 million to $66 million and average worksite employees (WSEs) are expected in a range of 174,200 to 175,800, representing growth of 10% to 11%.

For full year 2017, the company projects adjusted earnings of $4.21 to $4.42 and adjusted EBITDA in a range of $161 million to $168 million. Average WSEs are expected to be in the 185,000 to 188,000 bracket, representing growth of 11.5% to 13%.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There have been two upward revisions for the current quarter.

Insperity, Inc. Price and Consensus

 

Insperity, Inc. Price and Consensus | Insperity, Inc. Quote

VGM Scores

At this time, Insperity's stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. However, 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.ased on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for value and to a lesser degree momentum.

Outlook

Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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