It's been a sad week for Insperity, Inc. (NYSE:NSP), who've watched their investment drop 16% to US$66.02 in the week since the company reported its first-quarter result. Statutory earnings per share fell badly short of expectations, coming in at US$1.35, some 22% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$1.9b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Insperity's five analysts is for revenues of US$6.83b in 2025. This reflects a modest 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to plummet 21% to US$1.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.90b and earnings per share (EPS) of US$2.17 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

Check out our latest analysis for Insperity

The average price target fell 13% to US$77.25, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Insperity at US$85.00 per share, while the most bearish prices it at US$70.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Insperity's past performance and to peers in the same industry. We would highlight that Insperity's revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Insperity.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Insperity. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Insperity's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Insperity going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Insperity (at least 1 which is significant) , and understanding these should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.