It's been a sad week for Insperity, Inc. (NYSE:NSP), who've watched their investment drop 16% to US$66.02 in the week since the company reported its quarterly result. It looks like a pretty bad result, all things considered. Although revenues of US$1.9b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 22% to hit US$1.35 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Insperity's five analysts are now forecasting revenues of US$6.83b in 2025. This would be a satisfactory 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to nosedive 21% to US$1.33 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$6.90b and earnings per share (EPS) of US$2.17 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
Check out our latest analysis for Insperity
The average price target fell 13% to US$77.25, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Insperity, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$70.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Insperity's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Insperity is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Insperity. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Insperity's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Insperity going out to 2027, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with Insperity (including 1 which is a bit unpleasant) .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.