Why Is Insperity (NSP) Down 33.7% Since Last Earnings Report?

Core Viewpoint - Insperity, Inc. has experienced a significant decline in share price, losing approximately 33.7% since its last earnings report, underperforming the S&P 500, raising questions about the potential for a continued negative trend or a possible breakout before the next earnings release [1] Financial Performance - Insperity reported a lower-than-expected adjusted loss of 60 cents per share for Q4 2025, missing the Zacks Consensus Estimate of 49 cents, compared to earnings of 5 cents per share in the same quarter last year [2] - Revenues for the quarter were $1.7 billion, slightly missing the consensus estimate but reflecting a 3.4% increase year-over-year [2] - The average number of worksite employees paid per month increased by 1% year-over-year to 312,377, with revenues per worksite employee per month rising by 2% to $1,780 [3] Operating Results - Gross profit decreased by 21% year-over-year to $172 million, with a gross margin of 10.3%, down 320 basis points from Q4 2024 [4] - Operating expenses declined by 4% year-over-year to $220 million, with operating expenses per worksite employee per month decreasing by 7% to $233 [4] - The company reported an operating loss of $46 million, compared to a $15 million operating loss in the same quarter last year, resulting in an operating loss per worksite employee per month of $49, up from $16 [5] Balance Sheet & Cash Flow - Insperity ended Q4 2025 with cash and cash equivalents of $642 million, an increase from $422 million in the previous quarter, while long-term debt remained flat at $369 million [6] - The company distributed $38 million in cash dividends during the quarter, with capital expenditures totaling $9 million [6] Guidance - For Q1 2026, Insperity's EPS guidance is set between $1.03 and $1.50, with adjusted EBITDA expected to be between $81 million and $111 million [7] - For the full year 2026, the adjusted EPS guidance is between $1.69 and $2.72, and adjusted EBITDA is projected to be between $170 million and $230 million [7] Estimate Trends - Following the earnings release, there has been a downward trend in estimates, with the consensus estimate shifting down by 33% [8] VGM Scores - Insperity currently holds a Growth Score of A, but lags in Momentum Score with a C, while maintaining an A grade on the value side, placing it in the top quintile for investment [9][10] Outlook - The overall trend in estimates has been downward, leading to a Zacks Rank of 5 (Strong Sell), indicating expectations of below-average returns in the coming months [11]