ASGN Incorporated (NYSE:ASGN) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 8.4% to hit US$1.0b. ASGN reported statutory earnings per share (EPS) US$0.99, which was a notable 14% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the eight analysts covering ASGN are now predicting revenues of US$4.05b in 2021. If met, this would reflect a modest 2.3% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 13% to US$3.94. In the lead-up to this report, the analysts had been modelling revenues of US$4.02b and earnings per share (EPS) of US$3.86 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$77.57, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic ASGN analyst has a price target of US$88.00 per share, while the most pessimistic values it at US$64.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that ASGN's revenue growth is expected to slow, with forecast 2.3% increase next year well below the historical 15%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that ASGN is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ASGN's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that ASGN's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$77.57, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for ASGN going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with ASGN .
This article by Simply Wall St is general in nature. 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.
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