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Bear Of The Day: Insperity (NSP)

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Insperity (NSP) is a Zacks Rank #5 (Strong Sell) following a recent earnings miss. The stock was crushed after the print. That has been happening more and more of late, so let’s take a deeper look at this stock in this Bear of the Day article.

Description

Insperity provides an array of human resources (HR) and business solutions designed to help improve business performance. Since its formation in 1986, the company has evolved from being solely a professional employer organization (“PEO”) to a comprehensive business performance solutions provider.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

In the case of NSP, I see three straight beats of the Zacks Consensus Estimate and one miss. The miss was the most recent report. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For NSP I see annual estimates moving lower.

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.

The current year 2022 consensus number has dropped from $4.83 to $4.38.

The next year has dropped from $5.93 to $5.56 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).

Chart

Insperity, Inc. Price, Consensus and EPS Surprise

Insperity, Inc. Price, Consensus and EPS Surprise
Insperity, Inc. Price, Consensus and EPS Surprise

Insperity, Inc. price-consensus-eps-surprise-chart | Insperity, Inc. Quote


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