Insperity (NSP) Soars To A 52-Week High, Time To Cash Out?

Have you been paying attention to shares of Insperity, Inc. (NYSE:NSP) ? Shares have been on the move with the stock up 13.92% over the past month. NSP hit a new 52-week high of $67.80 in the previous session. Insperity has gained 17% since the start of the year compared to the 4.85% move for the Business Services sector and the 3.65% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 12, 2018, Insperity reported EPS of $0.55 versus the Zacks Consensus of $0.46 while it beat the consensus revenue estimate by 1.52%.

For the current fiscal year, Insperity is expected to post earnings of $2.96 per share on $3.69 billion in revenues. This represents a 20.82% change in EPS on a 11.93% change in revenues. For the next fiscal year, the company is expected to earn $3.49 per share on $4.12 billion in revenues. This represents changes of 17.87% and 11.44%, respectively.

Valuation Metrics

Insperity may be at a 52-week high right now, but what might the future hold for NSP? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Insperity has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 22.66x current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 26.53x versus its peer group's average of 13.97x. Additionally, the stock has a PEG ratio of 1.26. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Insperity, Inc. Price and Consensus

Insperity, Inc. Price and Consensus | Insperity, Inc. Quote

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Insperity currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Insperity passes the test. Thus, it seems as though NSP shares could have potential in the weeks and months to come.

How Does Insperity Stack Up to the Competition?

Shares of Insperity have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including NSP, ASGN, and MAN, all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 6.42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for NSP, even beyond its own solid fundamental situation.