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Insperity, Inc. (NSP - Free Report) reported solid fourth-quarter 2019 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of 57 cents per share beat the consensus mark by 3.6% but decreased 17.4% year over year. The reported figure came within the guided range of 50-61 cents.
Total revenues of $1.08 billion outpaced the consensus estimate by 1.6% and increased 11.2% year over year on the back of a 10% rise in average number of worksite employees (WSEEs) paid per month. Average number of worksite employees paid per month was 243,715 at the end of the reported quarter.
Over the past year, shares of Insperity have decreased 42.7% compared with 15.3% decline of the industry it belongs to.
Operating Results
Gross profit of $161.9 million increased 0.2% from the year-ago quarter as higher benefit costs were partially offset by improved pricing.Gross margin of 15.1% declined from 16.7% in the year-ago quarter. Gross profit per worksite employee per month decreased 9.1% year over year to $221.
Adjusted EBITDA was down 14.4% year over year to $40.7 million. Adjusted EBITDA per worksite employee per month decreased 22.2% to $56.
Adjusted operating expenses increased 4.1% year over year to $134.2 million. Adjusted operating expenses per worksite employee per month decreased 5.7% to $183.
Operating income decreased 15% year over year to $27.7 million. Operating income per worksite employee per month decreased 22.4% to $38.
Insperity exited fourth-quarter 2019 with adjusted cash, cash equivalents and marketable securities of $107.91 million compared with $130.86 million at the end of the prior quarter. Long-term debt amounted to $269.40 million compared with $239.40 million at the end of the previous quarter.
The companyrepurchased 643,000 shares for $49.4 million during the reported quarter.
Q1 Guidance
For first-quarter 2020, Insperity projects adjusted earnings in the range of $1.61-$1.70 per share. The midpoint of this guidance indicates a year-over-year decline of 16.4%. The current Zacks Consensus Estimate of $1.77 lies above the guided range.
Adjusted EBITDA is anticipated between $98 million and $103 million. The midpoint of this guidance indicates a year-over-year decline of 0.9%. Average WSEEs is expected in the range of 238,000-240,200, indicating 5.5-6.5% growth.
2020 Guidance
For 2020, Insperity unveiled its guidance for adjusted EPS, adjusted EBITDA and average WSEs.
The company projects adjusted earnings in the band of $3.73-$4.16 per share (indicating a decline of 10%). The current Zacks Consensus Estimate of $4.64 lies above the updated guidance.
Adjusted EBITDA is anticipated to grow 10% to a range of $250-$274 million. Average WSEEs are expected to grow 6-8% to a range of 249,700-254,400.
Investors interested in the broader Zacks Business Services sector are awaiting fourth-quarter 2019 earnings of key players like Verisk (VRSK - Free Report) , TransUnion (TRU - Free Report) and Green Dot (GDOT - Free Report) . While Verisk and TransUnion are slated to report their results on Feb 18, Green Dot is scheduled to release on Feb 19.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Insperity (NSP) Surpasses Q4 Earnings & Revenue Estimates
Insperity, Inc. (NSP - Free Report) reported solid fourth-quarter 2019 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of 57 cents per share beat the consensus mark by 3.6% but decreased 17.4% year over year. The reported figure came within the guided range of 50-61 cents.
Total revenues of $1.08 billion outpaced the consensus estimate by 1.6% and increased 11.2% year over year on the back of a 10% rise in average number of worksite employees (WSEEs) paid per month. Average number of worksite employees paid per month was 243,715 at the end of the reported quarter.
Over the past year, shares of Insperity have decreased 42.7% compared with 15.3% decline of the industry it belongs to.
Operating Results
Gross profit of $161.9 million increased 0.2% from the year-ago quarter as higher benefit costs were partially offset by improved pricing.Gross margin of 15.1% declined from 16.7% in the year-ago quarter. Gross profit per worksite employee per month decreased 9.1% year over year to $221.
Adjusted EBITDA was down 14.4% year over year to $40.7 million. Adjusted EBITDA per worksite employee per month decreased 22.2% to $56.
Adjusted operating expenses increased 4.1% year over year to $134.2 million. Adjusted operating expenses per worksite employee per month decreased 5.7% to $183.
Operating income decreased 15% year over year to $27.7 million. Operating income per worksite employee per month decreased 22.4% to $38.
Insperity, Inc. Price, Consensus and EPS Surprise
Insperity, Inc. price-consensus-eps-surprise-chart | Insperity, Inc. Quote
Balance Sheet & Cash Flow
Insperity exited fourth-quarter 2019 with adjusted cash, cash equivalents and marketable securities of $107.91 million compared with $130.86 million at the end of the prior quarter. Long-term debt amounted to $269.40 million compared with $239.40 million at the end of the previous quarter.
The companyrepurchased 643,000 shares for $49.4 million during the reported quarter.
Q1 Guidance
For first-quarter 2020, Insperity projects adjusted earnings in the range of $1.61-$1.70 per share. The midpoint of this guidance indicates a year-over-year decline of 16.4%. The current Zacks Consensus Estimate of $1.77 lies above the guided range.
Adjusted EBITDA is anticipated between $98 million and $103 million. The midpoint of this guidance indicates a year-over-year decline of 0.9%. Average WSEEs is expected in the range of 238,000-240,200, indicating 5.5-6.5% growth.
2020 Guidance
For 2020, Insperity unveiled its guidance for adjusted EPS, adjusted EBITDA and average WSEs.
The company projects adjusted earnings in the band of $3.73-$4.16 per share (indicating a decline of 10%). The current Zacks Consensus Estimate of $4.64 lies above the updated guidance.
Adjusted EBITDA is anticipated to grow 10% to a range of $250-$274 million. Average WSEEs are expected to grow 6-8% to a range of 249,700-254,400.
Zacks Rank & Stocks to Consider
Currently, Insperity carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are awaiting fourth-quarter 2019 earnings of key players like Verisk (VRSK - Free Report) , TransUnion (TRU - Free Report) and Green Dot (GDOT - Free Report) . While Verisk and TransUnion are slated to report their results on Feb 18, Green Dot is scheduled to release on Feb 19.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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