Insperity (NSP) AI Stock Analysis

• Market Cap: $2.52B
• Dividend Yield: 3.59%
• Average Volume (3M): 537.24K
• Price to Earnings (P/E): 40.5
• Beta (1Y): 0.84
• Revenue Growth: 1.90%
• EPS Growth: -60.33%
• Country: US
• Employees: 306,023
• Sector: Industrials
• Sector Strength: 79
• Industry: Staffing & Employment Services
• EPS (TTM): 1.65
• Shares Outstanding: 37,626,530
• 10 Day Avg. Volume: 642,808
• 30 Day Avg. Volume: 537,240
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 3.03
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $74.33
• Price Target Upside: 11.14% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Insperity's overall stock score reflects a cautious outlook. The company faces challenges with profitability and leverage, while technical indicators suggest negative momentum. The high P/E ratio points to possible overvaluation. Despite strong client retention, reduced financial guidance and economic uncertainties weigh on the stock's prospects.

Positive Factors

Negative Factors

Hiring Trends

Insperity has encountered the dual headwinds of softer SMB hiring and normalization from pandemic pull-forward of growth.

Investment Uncertainty

The $150M Workday investment presents new uncertainty in the model, and analysts argue the payback period may occur outside the medium-term investment horizon.

Medical Costs

Elevated medical cost trend in 2025 could spur pricing sensitivity, which presents lower margin for error.

Insperity Business Overview & Revenue Model

Company Description

Insperity, Inc. provides human resources (HR) and business solutions to improve business performance for small and medium-sized businesses. The company offers its HR services through its Workforce Optimization and Workforce Synchronization solutions that include a range of human resources functions, such as payroll and employment administration, employee benefits, workers' compensation, government compliance, performance management, and training and development services. It also provides Insperity Premier, a cloud-based human capital management platform that offers professional employer organization HR outsourcing solutions to its clients; personnel record management services; and employer liability management services, as well as solutions for middle market. In addition, the company offers MarketPlace, an e-commerce portal that offers a range of products and services; and Workforce Acceleration, a human capital management and payroll services solution; time and attendance; performance management; organizational planning; recruiting; employment screening; retirement; and insurance services. As of December 31, 2021, it operated through 85 sales offices in the United States. The company was formerly known as Administaff, Inc. and changed its name to Insperity, Inc. in March 2011. The company was founded in 1986 and is headquartered in Kingwood, Texas.

How the Company Makes Money

Insperity generates revenue primarily through its human resources outsourcing services, specifically by operating as a Professional Employer Organization (PEO). The company enters into co-employment relationships with its clients, allowing them to manage employee-related administrative tasks on behalf of the clients. This includes handling payroll processing, benefits administration, tax filing, and compliance with employment laws. Insperity charges its clients service fees based on the number of employees managed and the complexity of services provided. Additionally, Insperity earns revenue by negotiating and providing access to employee benefit plans and insurance products, where they may receive commissions or service fees from insurance carriers. Key partnerships with benefit providers and technology vendors also contribute to Insperity's ability to offer a robust suite of services that attract and retain clients.

Insperity Financial Statement Overview

Summary

Insperity's financial performance is mixed. Profitability is under pressure with declining margins and inconsistent revenue growth. The balance sheet is highly leveraged, posing potential risks. However, positive free cash flow is a bright spot, despite being reduced.

Income Statement

Insperity has shown a mixed performance in its income statement metrics. The gross profit margin for TTM (Trailing-Twelve-Months) is approximately 20%, indicating efficient cost management relative to revenue. However, the net profit margin has declined from previous years, with TTM standing at about 1.24%, compared to 1.38% in 2024 and 2.64% in 2023. Revenue growth has been inconsistent, with a decrease in TTM compared to 2024. EBIT and EBITDA margins have also seen a downturn, highlighting pressure on operating efficiency.

Balance Sheet

The balance sheet reflects a relatively high debt-to-equity ratio due to low stockholders' equity. TTM shows a debt-to-equity ratio of approximately 3.66, indicating significant leverage. Return on equity is positive, but the low equity base inflates these figures, with TTM ROE around 52.94%. The equity ratio is weak, standing at about 5.56% for TTM, suggesting limited asset protection by equity.

Cash Flow

Cash flow analysis reveals some concerns and strengths. TTM free cash flow has significantly decreased compared to previous periods, posing a challenge for liquidity. The operating cash flow to net income ratio for TTM is 0.73, indicating that net income is not fully translating into cash flow. However, the company maintained positive free cash flow, albeit reduced, which is crucial for ongoing operations and investments.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.58B	6.49B	5.94B	4.97B	4.29B
	Gross Profit
1.05B	1.04B	1.01B	820.10M	806.85M
	EBIT
117.00M	218.55M	250.24M	173.33M	194.69M
	EBITDA
198.00M	294.92M	300.29M	214.32M	228.47M
	Net Income Common Stockholders
91.00M	171.38M	179.35M	124.08M	138.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.05B	708.78M	765.90M	607.60M	589.38M
	Total Assets
2.60B	2.12B	2.04B	1.75B	1.58B
	Total Debt
435.00M	426.89M	424.99M	433.59M	433.69M
	Net Debt
-604.00M	-265.98M	-307.84M	-142.22M	-121.16M
	Total Liabilities
2.50B	2.03B	1.96B	1.75B	1.54B
	Stockholders Equity
97.00M	93.62M	81.28M	-1.77M	44.13M
Cash Flow		Free Cash Flow
482.00M	158.37M	317.36M	227.25M	248.19M
	Operating Cash Flow
520.00M	198.49M	347.69M	260.15M	346.35M
	Investing Cash Flow
-38.00M	-21.73M	-32.12M	-31.01M	-98.62M
	Financing Cash Flow
-173.00M	-155.01M	-141.15M	-208.07M	-53.58M

Insperity Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 66.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSP, the sentiment is Negative. The current price of 66.88 is below the 20-day moving average (MA) of 78.10, below the 50-day MA of 84.01, and below the 200-day MA of 83.69, indicating a bearish trend. The MACD of -4.71 indicates Positive momentum. The RSI at 28.50 is Positive, neither overbought nor oversold. The STOCH value of 22.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NSP.

Insperity Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BBSI	73 Outperform	$1.08B	21.18	25.20%	0.75%	7.03%	7.75%
KFY	69 Neutral	$3.33B	13.85	13.92%	2.48%	-3.27%	62.57%
TNET	69 Neutral	$3.89B	24.01	162.14%	1.27%	1.50%	-44.95%
Sector *	64 Neutral	$4.28B	11.80	5.33%	250.46%	4.10%	-9.26%
RHI	59 Neutral	$4.63B	22.69	14.49%	4.80%	-7.81%	-40.22%
MAN	57 Neutral	$2.39B	17.01	5.19%	6.96%	-5.52%	133.51%
NSP	53 Neutral	$2.52B	40.46	48.65%	3.59%	1.90%	-60.33%

Insperity Corporate Events

Insperity CFO Douglas Sharp to Retire in 2024

Insperity, Inc. announced the retirement of its CFO, Douglas S. Sharp, effective November 15, 2024, followed by a consulting agreement to assist in the transition of his duties until March 31, 2025. Sharp will receive $10,000 monthly and has agreed not to compete with Insperity or solicit its employees for two years post-consulting.