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Insperity (NSP)
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Insperity (NSP) AI Stock Analysis

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NSP

Insperity

(NYSE:NSP)

Rating:49Neutral
Price Target:
$54.00
â–¼(-2.91% Downside)
Insperity's overall stock score is driven by financial challenges, including high leverage and declining margins, and a bearish technical outlook. While strategic initiatives and partnerships offer future growth potential, current valuation concerns and recent earnings misses weigh heavily on the score.
Positive Factors
Product Launch
There is clear optimism over the early 2026 beta launch of HRScale, the company’s joint solution with Workday.
Negative Factors
Earnings
Insperity's second-quarter gross profit of $223 million was $16 million below the estimate, dragged down by persistently higher-than-expected benefit costs.
Guidance
The second-quarter miss and downward revision to the company’s 2025 adjusted EPS guidance drove shares meaningfully lower.

Insperity (NSP) vs. SPDR S&P 500 ETF (SPY)

Insperity Business Overview & Revenue Model

Company DescriptionInsperity, Inc. (NSP) is a leading provider of human resources and business performance solutions for small to medium-sized businesses across various sectors. Founded in 1986, the company offers a comprehensive range of services including payroll processing, employee benefits, human capital management, and workforce optimization. Insperity's core mission is to help businesses improve their performance through effective HR solutions and outsourcing, allowing clients to focus on their core operations while managing their workforce efficiently.
How the Company Makes MoneyInsperity generates revenue primarily through its Professional Employer Organization (PEO) services, which involve co-employing clients' employees and assuming many HR-related responsibilities. The company charges clients a service fee that typically includes a percentage of payroll and additional fees for services like benefits administration and compliance assistance. Key revenue streams also include payroll processing, employee benefits administration, and HR consulting services. Insperity has established significant partnerships with various insurance providers and technology platforms, enhancing its service offerings and contributing to its earnings. Additionally, the company benefits from economies of scale as it expands its client base, allowing it to negotiate better rates for employee benefits, which further drives profitability.

Insperity Earnings Call Summary

Earnings Call Date:Aug 01, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Neutral
The earnings call indicated a challenging quarter with lower-than-expected earnings due to high benefits costs, but also showed signs of improvement in sales efficiency and client retention. Strategic initiatives such as the Workday partnership are progressing well, offering potential for future growth.
Q2-2025 Updates
Positive Updates
Sales Efficiency Improvement
Sales efficiency improved by 13% in Q2, validating the sales organization changes put in place earlier in the year.
Client Retention and Growth
Client retention averaged 99% per month, and net hiring within the client base exceeded expectations and Q2 2024 levels.
Strategic Partnership with Workday
Significant progress was made with the Workday strategic partnership, including the upcoming launch of Insperity HRScale for beta clients early next year.
Workday Pricing Strategy
The Insperity HRScale pricing strategy was completed, affirming premium pricing potential compared to historical HR360 pricing.
Negative Updates
Earnings Miss
Second quarter EPS of $0.26 and adjusted EBITDA of $32 million fell slightly under the low end of the forecasted range.
Higher Benefits Costs
Benefits costs exceeded forecasts by $12 million due to higher pharmacy costs and a modest increase in incurred but not reported claims.
Gross Profit Decline
Gross profit per worksite employee in Q2 2025 was $240 per month, down from $282 in Q2 of 2024.
Company Guidance
During the Insperity Second Quarter 2025 Earnings Conference Call, the company provided detailed guidance for the rest of 2025 and shared its outlook for 2026. Insperity reported a second quarter EPS of $0.26 and an adjusted EBITDA of $32 million, both slightly below expectations due to higher-than-anticipated benefits costs. The company achieved a 0.7% increase in the average number of paid worksite employees, totaling 309,115, and noted a 2% increase in worksite employees from new sales compared to Q2 2024. Client retention remained strong at 99% per month. However, gross profit per worksite employee fell to $240 from $282 in Q2 2024 due to increased benefits costs, particularly in pharmacy. For the full year 2025, Insperity forecasts worksite employee growth of 1% to 2%, adjusted EBITDA between $170 million and $205 million, and adjusted EPS ranging from $1.81 to $2.51. The company anticipates a moderation in benefits cost trends and continued operating expense management, with the expectation of improved profitability in 2026 through strategic pricing, plan design changes, and contract negotiations with UHC.

Insperity Financial Statement Overview

Summary
Insperity's financial performance shows strong revenue growth, but profitability and cash flow metrics are concerning. High leverage and declining margins indicate potential financial instability and operational inefficiency.
Income Statement
65
Positive
Insperity's revenue has shown consistent growth over the years, with a notable increase in the TTM period. However, margins have been under pressure, with a decline in gross and net profit margins in the latest TTM data compared to previous years. The EBIT and EBITDA margins have also decreased, indicating challenges in maintaining operational efficiency.
Balance Sheet
50
Neutral
The company has a high debt-to-equity ratio, which poses a risk in terms of financial leverage. Although there has been some improvement in stockholders' equity, the overall equity ratio remains low. Return on equity has decreased significantly, indicating reduced profitability from shareholders' investments.
Cash Flow
40
Negative
Insperity's cash flow situation has deteriorated, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is significantly negative, and the operating cash flow to net income ratio is unfavorable, highlighting liquidity challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue6.70B6.58B6.49B5.94B4.97B4.29B
Gross Profit980.00M1.05B1.04B1.01B820.10M806.85M
EBITDA126.00M198.00M294.92M300.29M214.32M228.47M
Net Income40.00M91.00M171.38M179.35M124.08M138.24M
Balance Sheet
Total Assets2.02B2.60B2.12B2.04B1.75B1.58B
Cash, Cash Equivalents and Short-Term Investments456.00M1.05B708.78M765.90M607.60M589.38M
Total Debt436.00M435.00M426.89M424.99M433.59M433.69M
Total Liabilities1.91B2.50B2.03B1.96B1.75B1.54B
Stockholders Equity112.00M97.00M93.62M81.28M-1.77M44.13M
Cash Flow
Free Cash Flow-93.00M482.00M158.37M317.36M227.25M248.19M
Operating Cash Flow-53.00M520.00M198.49M347.69M260.15M346.35M
Investing Cash Flow-38.00M-38.00M-21.73M-32.12M-31.01M-98.62M
Financing Cash Flow-124.00M-173.00M-155.01M-141.15M-208.07M-53.58M

Insperity Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price55.62
Price Trends
50DMA
55.71
Negative
100DMA
61.41
Negative
200DMA
70.47
Negative
Market Momentum
MACD
-0.12
Negative
RSI
54.01
Neutral
STOCH
58.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSP, the sentiment is Neutral. The current price of 55.62 is above the 20-day moving average (MA) of 53.06, below the 50-day MA of 55.71, and below the 200-day MA of 70.47, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 58.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NSP.

Insperity Risk Analysis

Insperity disclosed 22 risk factors in its most recent earnings report. Insperity reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Insperity Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$3.86B16.0013.49%2.32%-1.23%44.06%
75
Outperform
$1.26B24.1925.36%0.65%9.48%11.62%
67
Neutral
$3.48B24.30139.13%1.49%1.39%-50.47%
64
Neutral
$3.80B21.2212.75%6.16%-6.95%-41.84%
64
Neutral
$10.73B15.747.64%2.01%2.76%-15.10%
54
Neutral
$1.91B18.36-0.78%5.47%-3.79%-138.56%
49
Neutral
$2.10B52.7631.50%4.31%2.40%-75.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NSP
Insperity
54.00
-29.80
-35.56%
BBSI
Barrett Business Services
48.14
13.83
40.31%
KFY
Korn Ferry
73.23
8.20
12.61%
MAN
ManpowerGroup
41.26
-25.48
-38.18%
RHI
Robert Half
37.03
-20.98
-36.17%
TNET
TriNet Group
70.66
-22.23
-23.93%

Insperity Corporate Events

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Insperity Reports Q2 2025 Results with Revenue Growth
Neutral
Aug 1, 2025

On August 1, 2025, Insperity reported its second-quarter results for 2025, revealing a 3% increase in revenues to $1.7 billion despite a net loss of $5 million. The company experienced a 14% decrease in gross profit due to higher benefits costs, but maintained a positive outlook for future growth, highlighting its strategic partnership with Workday and plans for accelerated growth in 2026. Insperity’s average paid worksite employees increased by 1% year-over-year, and the company returned $64 million to shareholders through share repurchases and dividends in the first half of 2025.

Executive/Board ChangesBusiness Operations and Strategy
Insperity Approves Performance-Based Awards for Executives
Positive
Jul 1, 2025

On June 30, 2025, Insperity‘s Board of Directors approved special performance-based equity awards for its CEO, Paul J. Sarvadi, and COO, A. Steve Arizpe, to align with the company’s pay-for-performance philosophy and incentivize long-term stockholder value. These awards are tied to significant stock price appreciation and are part of a strategy to retain key executives during a transformative phase, which includes launching a joint HR solution with Workday, aimed at expanding Insperity’s market reach and enhancing growth and profitability.

Shareholder MeetingsBusiness Operations and Strategy
Insperity Holds 2025 Annual Meeting in Kingwood
Neutral
May 27, 2025

On May 20, 2025, Insperity held its 2025 Annual Meeting at its corporate headquarters in Kingwood, Texas. The meeting included the election of Class III directors, approval of executive compensation, an amendment to the incentive plan, and the ratification of Ernst & Young LLP as the independent accounting firm for 2025, reflecting shareholder support for the company’s strategic and operational decisions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 22, 2025