Insperity (NSP, Financial) experienced a significant decline, with its stock price dropping to $67.95, representing a 13.57% decrease. This movement followed the release of its first-quarter 2025 earnings report, where the company fell short of Wall Street's expectations in terms of both earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA).
Despite a slight growth in sales, Insperity's operating income declined, highlighting margin pressures. Consequently, the company revised its guidance for the full year downward. The report was not well-received by investors, contributing to the sharp drop in the stock price.
From a valuation perspective, Insperity's price-to-earnings (P/E) ratio stands at 28.2, while its price-to-book (P/B) ratio is 26.03. The company's Enterprise Value (EV) is estimated at $2,341.83 million. Notably, while the current market cap is $2,556.61 million, the stock's intrinsic value, or GF Value, is deemed to be $123.59, marking it as "Significantly Undervalued" according to GF Value.
Insperity's financial strength is supported by a strong Altman Z-score of 3.91. However, the company faces challenges with a historically declining gross margin and operating margin, which have been falling at an average annual rate of -2.2% and -13.7%, respectively, over the past five years.
Despite these issues, there are positive signs. Insperity has a dividend yield close to its five-year high and has witnessed insider buying activity, which could suggest confidence from within the company. The current dividend yield stands at 3.55%, adding some attraction for income-focused investors.
Overall, while Insperity (NSP, Financial) faces near-term challenges, the underlying valuation metrics and insider activities present a mixed picture, suggesting potential opportunities for long-term investors.
