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ASGN Incorporated (ASGN)
NYSE:ASGN
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ASGN
(NYSE:ASGN)61Neutral
Positive Factors
Acquisition
The acquisition of TopBloc is expected to accelerate the shift to higher-value consulting for ASGN.
Financial Performance
ASGN's focus on digital transformation and AI/ML helps clients enhance their own efficiencies, reducing risks associated with Federal Government cuts.
Negative Factors
Federal Government Revenue
Federal government revenues fell 10% y/y, worse than expected, from lower-than-anticipated software licensing.
ASGN (ASGN) vs. S&P 500 (SPY)
Market Cap
$2.88B
Dividend YieldN/A
Average Volume (3M)549.54K
Price to Earnings (P/E)17.2
Beta (1Y)1.04
Revenue Growth-7.88%
EPS Growth-14.39%
CountryUS
Employees3,700
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)3.84
Shares Outstanding43,600,000
10 Day Avg. Volume688,656
30 Day Avg. Volume549,544
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.69
Price to Cash Flow (P/CF)7.10
P/FCF Ratio6.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$94.20Price Target Upside43.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
ASGN Business Overview & Revenue Model
Company DescriptionASGN Incorporated is a prominent provider of IT and professional services in North America, catering to a wide array of industries including technology, healthcare, and government sectors. The company specializes in delivering highly skilled professionals for both temporary and permanent positions, as well as offering comprehensive IT solutions and services. ASGN operates through its key segments: Commercial and Federal, provisioning clients with tailored workforce solutions and cutting-edge technological expertise.
How the Company Makes MoneyASGN makes money primarily through its staffing and IT services. In the Commercial segment, the company generates revenue by placing skilled professionals in temporary, contract, and permanent roles across various industries. The Federal segment focuses on providing IT services and solutions to government clients, including cybersecurity, cloud computing, and digital transformation services. ASGN's revenue model is driven by billing clients for the professional services and solutions provided, often based on hourly rates, project-based fees, or fixed-price contracts. Key factors contributing to ASGN's earnings include its ability to attract and retain top talent, maintain strong client relationships, and adapt to evolving industry demands.
ASGN Financial Statement Overview
Summary
ASGN's financial performance is stable with strong cash flow management and a solid balance sheet. Despite challenges in revenue growth and profit margin pressures, the company's operational efficiency remains consistent.Income Statement
ASGN's income statement shows a mixed performance. The gross profit margin is solid at 28.9% for 2024, but the net profit margin has decreased slightly to 4.3% from 4.9% in 2023. Revenue has been declining, with a revenue growth rate of -7.9% from 2023 to 2024, indicating challenges in maintaining top-line growth. However, EBIT and EBITDA margins remain stable at 7.4% in 2024, reflecting consistent operational efficiency.65
Positive
Balance Sheet
The balance sheet of ASGN is relatively strong with a debt-to-equity ratio of 0.62, indicating a manageable level of debt compared to equity. Return on equity stands at 9.9%, showing decent profitability on shareholders' investments. The equity ratio is 51.8%, suggesting a healthy proportion of assets financed by equity. Although there is a slight decline in stockholders' equity, the overall financial stability remains solid.70
Positive
Cash Flow
ASGN demonstrates robust cash flow management. The operating cash flow to net income ratio is strong at 2.28, indicating efficient conversion of net income into cash. Free cash flow remains consistent, with a minor decrease in the free cash flow to net income ratio to 2.28. However, free cash flow growth has stalled, reflecting a need for renewed cash flow generation strategies.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.10B | 4.45B | 4.58B | 4.01B | 3.95B | Gross Profit |
| 1.18B | 1.28B | 1.37B | 1.14B | 1.09B | EBIT |
| 304.40M | 364.10M | 409.50M | 350.90M | 310.40M | EBITDA |
| 304.40M | 464.40M | 500.90M | 440.50M | 370.90M | Net Income Common Stockholders |
| 175.20M | 219.30M | 268.10M | 231.80M | 200.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 205.20M | 175.90M | 70.30M | 529.60M | 274.40M | Total Assets |
| 3.43B | 3.54B | 3.59B | 3.50B | 3.28B | Total Debt |
| 1.10B | 1.11B | 1.12B | 1.10B | 1.13B | Net Debt |
| 894.70M | 929.30M | 1.05B | 567.80M | 851.30M | Total Liabilities |
| 1.65B | 1.65B | 1.68B | 1.64B | 1.69B | Stockholders Equity |
| 1.78B | 1.89B | 1.90B | 1.87B | 1.59B |
| Cash Flow | Free Cash Flow | |||
| 400.00M | 417.00M | 270.30M | 159.00M | 392.20M | Operating Cash Flow |
| 400.00M | 456.90M | 307.80M | 193.70M | 424.80M | Investing Cash Flow |
| -35.30M | -40.50M | -510.00M | 246.50M | -219.00M | Financing Cash Flow |
| -333.20M | -310.90M | -256.50M | -184.40M | -29.00M |
ASGN Technical Analysis
Negative
65.44
Price Trends
81.78
Negative
86.99
Negative
89.87
Negative
Market Momentum
-5.25
Positive
24.15
Positive
19.60
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASGN, the sentiment is Negative. The current price of 65.44 is below the 20-day moving average (MA) of 73.12, below the 50-day MA of 81.78, and below the 200-day MA of 89.87, indicating a bearish trend. The MACD of -5.25 indicates Positive momentum. The RSI at 24.15 is Positive, neither overbought nor oversold. The STOCH value of 19.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ASGN.
ASGN Risk Analysis
ASGN disclosed 29 risk factors in its most recent earnings report. ASGN reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ASGN Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $41.42B | 18.58 | 16.21% | 1.44% | 1.98% | 7.16% | |
77 Outperform | $3.19B | 35.79 | 95.48% | 2.77% | 1.47% | -45.91% | |
75 Outperform | $3.30B | 13.67 | 14.20% | 2.25% | -3.59% | 138.97% | |
61 Neutral | $2.88B | 17.17 | 9.86% | ― | -7.88% | -14.39% | |
60 Neutral | $5.62B | 22.51 | 16.96% | 3.96% | -9.33% | -37.06% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
58 Neutral | $2.68B | 19.09 | 6.67% | 5.37% | -5.61% | 77.92% |
* Technology Sector Average
Performance Comparison
ASGN
ASGN
65.44
-37.08
-36.17%
CTSH
Cognizant
84.28
8.02
10.52%
NSP
Insperity
86.06
-12.34
-12.54%
KFY
Korn Ferry
64.80
1.14
1.79%
MAN
ManpowerGroup
58.61
-13.12
-18.29%
RHI
Robert Half
55.45
-22.17
-28.56%
ASGN Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -25.53% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While there is notable growth in IT consulting revenues and successful strategic acquisitions like TopBloc, the overall revenue decline and specific challenges in the Federal Government segment present concerns. The company shows promising strategic alignment and client engagement but faces ongoing softness in assignment revenues.Highlights
Growth in IT Consulting Revenues
IT consulting revenues comprised approximately 58% of total revenues for the year, up from roughly 53% in the prior year period.
Double-Digit Growth in Commercial Consulting Bookings
Commercial consulting bookings experienced double-digit year-over-year growth in the fourth quarter, totaling $348.2 million with a book-to-bill ratio of 1.2 times.
Successful Tuck-In Acquisitions
ASGN announced a definitive agreement to acquire TopBloc, a preferred certified Workday Services Partner, enhancing its ERP implementation capabilities.
Robust Federal Government Segment Win Rate
The Federal Government segment maintained a win rate of approximately 90% for re-competed contracts, with a contract backlog of over $3.1 billion.
Lowlights
Revenue Decrease
Revenues for the fourth quarter totaled $985 million, a decrease of 8.3% year-over-year.
Federal Government Segment Revenue Decline
Revenues from the Federal Government segment were $292.3 million, a decrease of 10.2% year-over-year, partly due to lower-than-expected software license sales.
Continued Softness in Commercial Assignment Revenues
Assignment revenues in the Commercial Segment totaled $408 million, a decline of 15% year-over-year due to ongoing softness in the cyclical portion of the business.
Company Guidance
During ASGN Incorporated's fourth-quarter and full-year 2024 earnings call, the company provided several key metrics and insights into its financial performance and strategic priorities. IT consulting revenues comprised 58% of total revenues for the year, up from 53% the previous year. The company's adjusted EBITDA margin exceeded expectations, driven by strong performance in consulting bookings, which reached $348.2 million with a book-to-bill ratio of 1.2 times for the quarter. Despite revenue declines in the Federal Government segment due to lower-than-expected software license sales, the commercial segment outperformed, with consulting revenues up 6% year-over-year. The company announced a definitive agreement to acquire TopBloc for $340 million, expected to close in the first quarter of 2025, which is anticipated to contribute $150 million in revenue with an EBITDA margin in the high teens for the year. ASGN also noted improvements in business confidence and highlighted strategic initiatives in AI, cybersecurity, and data services as key areas for future growth.ASGN Corporate Events
Executive/Board ChangesM&A TransactionsBusiness Operations and Strategy
ASGN Acquires TopBloc, Enhancing ERP Capabilities
Positive
Mar 4, 2025
On March 4, 2025, ASGN Incorporated announced the successful acquisition of TopBloc, LLC for $340 million in cash and equity, integrating TopBloc’s team into ASGN’s Consulting Services. This strategic move enhances ASGN’s capabilities in the ERP and Workday marketplace, aligning with in-demand solutions and technology partners. Additionally, Shiv Iyer officially assumed the role of President, succeeding Rand Blazer, who transitioned to Executive Vice Chairman. Iyer’s extensive consulting experience, particularly his leadership at Accenture, is expected to contribute to ASGN’s strategic initiatives and seamless leadership transition.
Executive/Board ChangesBusiness Operations and Strategy
ASGN Announces Leadership Transition with New President
Neutral
Jan 30, 2025
ASGN Incorporated announced the resignation of President Rand Blazer, effective March 1, 2025, who will transition to Executive Vice Chairman to assist with leadership transition and strategic initiatives. Shiv Iyer, previously with Accenture, will assume the role of President, bringing two decades of consulting experience to drive ASGN’s growth and strengthen its IT solutions capabilities. Blazer’s leadership over the past twelve years significantly transformed ASGN’s market positioning, evolving it from a staffing company to a high-end IT services provider.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.