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Insperity (NSP) to Report Q4 Earnings: What’s in the Cards?

Zacks

Insperity Inc. NSP, the Human Capital Management (HCM) platform provider, is set to release fourth-quarter 2017 results on Feb 12.

Notably, the company beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 11.36%.

Last quarter, Insperity delivered a positive earnings surprise of 16.33%. Earnings of 57 cents (two for one split-adjusted) surged 46.2% from the year-ago quarter driven by strong revenues that increased 13.2% on a year-over-year basis. Revenues of $795.5 million also topped the Zacks Consensus Estimate of $785 million.

For fourth-quarter 2017, adjusted EBITDA is projected in the range of $37.5-$39.5 million, implying growth of 56-65%. Average worksite employees (WSEs) are expected in the range of 187,500-188,300, representing growth of 11-11.5%.

Insperity, Inc. Price and EPS Surprise

Insperity, Inc. Price and EPS Surprise | Insperity, Inc. Quote


Let's have a look on how things are shaping up for this announcement.

Diversified Product Portfolio: Key Catalyst

Insperity continues to capitalize on client retention, diversified product portfolio, growth in worksite employees and strength in ancillary products. Moreover, the company’s focus on small and mid-sized companies presents significant growth opportunity.

Launched early August, Insperity Premier is a cloud-based HCM system. The platform has gained significant traction within a short span of time that bodes well for Insperity’s top-line growth in the soon-to-be-reported quarter.

Insperity’s strategy of increasing the number of Business Performance Advisors (BPA) is likely to expand new client sales. Moreover, the company is well poised to benefit from the booming PEO industry.

However, intensifying competition remains a concern.

Unfavorable ESP

Per the proven Zacks model, Insperity is unlikely to deliver a positive earnings surprise in the fourth quarter due to an unfavorable combination of Zacks Rank #3 (Hold) and Earnings ESP of -0.65%.

Accordingly, the Sell-rated stocks (#4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

The Trade Desk TTD has an Earnings ESP of +4.78% and a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Micron Technology MU has an Earnings ESP of +1.83% and a Zacks Rank #1.

Broadcom AVGO has an Earnings ESP of +1.08% and a Zacks Rank #3.

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