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Will Insperity's (NSP) Earnings Spring a Surprise in Q4?

Insperity, Inc. NSP is set to report fourth-quarter 2016 results on Feb 13. Though the company reported a positive earnings surprise of 4.76% last quarter, it has an average negative earnings surprise of 8.01% over the trailing four quarters.

Let's see how things are shaping up for this announcement.

Factors to Consider

The company is well placed to benefit from the booming professional employer organization (PEO) industry, strong client retention and growth in worksite employees in the long run.

However, a sluggish global macro environment increases the risk of headcount reductions at client companies. An increase in health care costs does not bode well for Insperity as well as it is one of the major components of operating expenses. Furthermore, increasing competition from the likes of Automatic Data Processing Inc. ADP and TriNet Group, Inc. remain concerns.

For the fourth quarter of 2016, Insperity projects adjusted earnings in a range of 52 cents to 57 cents a share. Adjusted EBITDA is projected to be in a range of $22.5 million to $24.5 million and average worksite employees (WSEs) are expected in a range of 173,000-173,750, representing growth of 13% to 13.5%.

Insperity, Inc. Price and EPS Surprise

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

Earnings Whispers

Our proven model does not conclusively show that Insperity is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP : Insperity currently has a 0.00% ESP because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 42 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Insperity has a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a couple of stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:

NICE Ltd. NICE has an Earnings ESP of +1.94% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

GoDaddy Inc. GDDY with an Earnings ESP of +12.50% and a Zacks Rank #3

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Nice Systems Ltd. (NICE): Free Stock Analysis Report

Insperity, Inc. (NSP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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