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Reasons to Retain Insperity (NSP) Stock in Your Portfolio Now
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Insperity (NSP - Free Report) witnesses significant top-line growth due to its diversified revenue base and benefits from the growing Professional Employer Organization (PEO) industry. However, rising expenses are expected to keep the bottom line under pressure.
The company’s revenues for 2024 and 2025 are expected to increase 2.1% and 7.5%, respectively, year over year. The company has an expected long-term (three to five years) earnings per share growth rate of 15%.
Insperity’s diversified revenue base not only ensures continuous growth in revenues but also mitigates market risks. In 2023, the company reported total revenues of $6.5 billion, marking 9.2% year-over-year growth. The rise is attributed to a 3.2% increase in revenues per worksite employee and 5.8% growth in the number of paid worksite employees, with an average of 315,072 worksite employees paid per month.
The increment in worksite employees is attributed to NSP's strong sales performance, enhanced client retention rates and an upsurge in net hiring of worksite employees by the company’s client base.
NSP’s performance looks solid on the back of the growing PEO industry. This progress is currently being driven by growth of small and medium-sized businesses, escalation in costs related to workers’ compensation insurance coverage, workplace safety programs, employee-related complaints, and litigation, complex regulation of payroll, payroll tax and employment issues.
The company’s shareholders are being rewarded consistently in terms of share repurchase and dividends. In 2023 and 2022, NSPrepurchased 1.3 million shares and 770,000 shares for $131.5 million and $69.7 million, respectively. It has paid out dividends of $84.2 and $77, respectively. In 2021, the company repurchased 716,000 shares for $69.7 million and paid out dividends of $144.2 million.
The above-mentioned actions suggest Insperity’s commitment to boosting shareholders’ value, thereby positively impacting its bottom line.
Risk
NSP is witnessing an increase in expenses as it continues to invest in growth, technology, and product and service offerings. Total operating expenses increased 7.5% on a year-over-year in 2023. The same rose 17.7% year over year in 2022 and 5.7% in 2021. The rise in such expenses is anticipated to keep the company’s bottom line under pressure in the future.
Zacks Rank & Stocks to Consider
Insperity currently carries a Zacks Rank #3 (Hold).
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Reasons to Retain Insperity (NSP) Stock in Your Portfolio Now
Insperity (NSP - Free Report) witnesses significant top-line growth due to its diversified revenue base and benefits from the growing Professional Employer Organization (PEO) industry. However, rising expenses are expected to keep the bottom line under pressure.
The company’s revenues for 2024 and 2025 are expected to increase 2.1% and 7.5%, respectively, year over year. The company has an expected long-term (three to five years) earnings per share growth rate of 15%.
Insperity, Inc. Revenue (TTM)
Insperity, Inc. revenue-ttm | Insperity, Inc. Quote
Factors That Auger Well
Insperity’s diversified revenue base not only ensures continuous growth in revenues but also mitigates market risks. In 2023, the company reported total revenues of $6.5 billion, marking 9.2% year-over-year growth. The rise is attributed to a 3.2% increase in revenues per worksite employee and 5.8% growth in the number of paid worksite employees, with an average of 315,072 worksite employees paid per month.
The increment in worksite employees is attributed to NSP's strong sales performance, enhanced client retention rates and an upsurge in net hiring of worksite employees by the company’s client base.
NSP’s performance looks solid on the back of the growing PEO industry. This progress is currently being driven by growth of small and medium-sized businesses, escalation in costs related to workers’ compensation insurance coverage, workplace safety programs, employee-related complaints, and litigation, complex regulation of payroll, payroll tax and employment issues.
The company’s shareholders are being rewarded consistently in terms of share repurchase and dividends. In 2023 and 2022, NSPrepurchased 1.3 million shares and 770,000 shares for $131.5 million and $69.7 million, respectively. It has paid out dividends of $84.2 and $77, respectively. In 2021, the company repurchased 716,000 shares for $69.7 million and paid out dividends of $144.2 million.
The above-mentioned actions suggest Insperity’s commitment to boosting shareholders’ value, thereby positively impacting its bottom line.
Risk
NSP is witnessing an increase in expenses as it continues to invest in growth, technology, and product and service offerings. Total operating expenses increased 7.5% on a year-over-year in 2023. The same rose 17.7% year over year in 2022 and 5.7% in 2021. The rise in such expenses is anticipated to keep the company’s bottom line under pressure in the future.
Zacks Rank & Stocks to Consider
Insperity currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the broader Zacks Business Services sector are Docusign (DOCU - Free Report) and Elastic (ESTC - Free Report) .
Docusign presently has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DOCU has a long-term earnings growth expectation of 7.3%. It delivered a trailing four-quarter earnings surprise of 15.7%, on average.
Elastic currently carries a Zacks Rank of 2. It has a long-term earnings growth expectation of 23.5%.
ESTC delivered a trailing four-quarter earnings surprise of 52%, on average.