Truist analyst Tobey Sommer has revised the price target for Insperity (NSP, Financial), reducing it from $82 to $70 while maintaining a Hold rating. This adjustment follows the company's disappointing first-quarter earnings and guidance that fell short of market expectations. Sommer points to weakening sentiment among small and medium-sized businesses and potential healthcare-related challenges, including increased utilization, as reasons for the updated outlook.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Insperity Inc (NSP, Financial) is $82.33 with a high estimate of $105.00 and a low estimate of $70.00. The average target implies an upside of 27.45% from the current price of $64.60. More detailed estimate data can be found on the Insperity Inc (NSP) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Insperity Inc's (NSP, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Insperity Inc (NSP, Financial) in one year is $130.85, suggesting a upside of 102.55% from the current price of $64.6. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Insperity Inc (NSP) Summary page.
NSP Key Business Developments
Release Date: April 29, 2025
- Adjusted EPS: $1.57 for Q1 2025.
- Adjusted EBITDA: $102 million for Q1 2025.
- Average Paid Worksite Employees: Increased by 0.7% to 306,000 compared to Q1 2024.
- Client Retention Rate: 91% in Q1 2025, up from 88% in Q1 2024.
- Gross Profit per Worksite Employee: $338 per month in Q1 2025, down from $378 in Q1 2024.
- Benefits Costs per Covered Employee: Increased by 8.4% year over year.
- Operating Expenses: Increased by $5 million or 2% over Q1 2024.
- Cash Dividends Paid: $23 million in Q1 2025.
- Share Repurchase: 224,000 shares at a cost of $19 million in Q1 2025.
- Adjusted Cash: $124 million at the end of Q1 2025.
- Credit Facility Availability: $280 million at the end of Q1 2025.
- Full Year 2025 Adjusted EBITDA Guidance: $190 million to $245 million.
- Full Year 2025 Adjusted EPS Guidance: $2.23 to $3.28.
- Q2 2025 Adjusted EBITDA Guidance: $33 million to $53 million.
- Q2 2025 Adjusted EPS Guidance: $0.29 to $0.67.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Insperity Inc (NSP, Financial) reported a year-over-year increase in the average number of paid worksite employees by 0.7% to 306,000.
- Client retention improved significantly, with a retention rate of 91% in Q1 2025 compared to 88% in Q1 2024.
- The company has initiated a strategic partnership with Workday, which is expected to drive future growth and enhance service offerings.
- Insperity Inc (NSP) has implemented a pricing initiative to address rising benefits costs, aiming to realign pricing by January 2026.
- The company continues to return capital to shareholders, paying $23 million in dividends and repurchasing 224,000 shares for $19 million in Q1 2025.
Negative Points
- First quarter adjusted EPS of $1.57 and adjusted EBITDA of $102 million fell below guidance due to higher-than-expected benefits costs.
- Benefits costs per covered employee increased by 8.4% year-over-year, impacting gross profit.
- The macroeconomic environment and uncertainty around new administration policies led to delays or cancellations of new client starts.
- Net client hiring was weak, with only slight positive growth, significantly lower than historical norms.
- The company has reduced its expected worksite employee growth rate by over 100 basis points due to macroeconomic challenges.
