ASGN (NYSE:EFOR) Announces Quarterly Earnings Results, Beats Estimates By $0.09 EPS

Key Points

• ASGN exceeded quarterly expectations, reporting $0.91 in EPS versus the $0.82 consensus and revenue of $1.01 billion versus estimates of $986.95 million. Revenue surpassed $1 billion and adjusted EBITDA margin reached 9.6%, above the high end of guidance.
• Commercial bookings improved, with stronger Workday demand lifting the trailing-12-month book-to-bill ratio to 1.2x. Management cited growing demand for AI, cloud infrastructure, cybersecurity and enterprise platforms, and expects commercial revenue to return to year-over-year growth by the fourth quarter.
• Challenges remain: revenue declined year over year in commercial consulting and federal government, while federal book-to-bill was 0.8x. Analysts’ average rating is “Reduce,” with an average price target of $29.83, and management is prioritizing debt repayment after the Quinnox acquisition.

ASGN (NYSE:EFOR - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported $0.91 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.82 by $0.09, FiscalAI reports. The company had revenue of $1.01 billion during the quarter, compared to the consensus estimate of $986.95 million. ASGN had a return on equity of 10.30% and a net margin of 2.46%.

Here are the key takeaways from ASGN's conference call:

• Second-quarter results exceeded guidance, with revenue above $1 billion and adjusted EBITDA margin of 9.6%, both above the high end of the company’s outlook.
• Commercial bookings improved meaningfully, including stronger-than-expected Workday demand, lifting trailing-12-month book-to-bill to 1.2x. Management said bookings conversion has returned toward historical norms and expects commercial revenue to reach year-over-year growth by the fourth quarter.
• Everforth reported broad-based sequential improvement across all five commercial verticals and cited growing demand for AI, cloud infrastructure, cybersecurity, and enterprise platforms. The company also highlighted new federal AI and cybersecurity awards, hyperscaler data-center work, and potential revenue synergies from Quinnox.
• Revenue remained down year over year in both commercial consulting, by 0.9%, and federal government, by 2.3%; federal trailing-12-month book-to-bill was only 0.8x. The company expects more meaningful federal revenue acceleration in the fourth quarter and into 2027.
• Third-quarter guidance calls for revenue of $994 million to $1.024 billion and adjusted EBITDA margin of 9.6% to 10.3%, while including $7.5 million to $9.5 million of strategic-planning expenses. Free-cash-flow conversion was 48% of adjusted EBITDA in the quarter versus a full-year target of 60%–65%, and management prioritized debt repayment following the Quinnox acquisition.

ASGN Stock Up 0.9%

Shares of ASGN stock traded up $0.20 during mid-day trading on Wednesday, reaching $23.45. 1,521,151 shares of the stock traded hands, compared to its average volume of 1,050,300. The stock has a market capitalization of $963.79 million, a PE ratio of 10.38 and a beta of 0.52. The company has a 50-day moving average price of $19.42. ASGN has a fifty-two week low of $16.90 and a fifty-two week high of $54.94. The company has a quick ratio of 2.10, a current ratio of 2.10 and a debt-to-equity ratio of 0.82.

Analysts Set New Price Targets

Several research firms have recently issued reports on EFOR. Robert W. Baird lowered their target price on shares of ASGN from $62.00 to $38.00 and set a "neutral" rating on the stock in a research note on Thursday, April 23rd. UBS Group cut their price target on ASGN from $35.00 to $17.00 and set a "sell" rating for the company in a research note on Friday, May 22nd. Zacks Research upgraded ASGN from a "strong sell" rating to a "hold" rating in a research report on Monday, June 22nd. BMO Capital Markets lowered ASGN from an "outperform" rating to a "market perform" rating and set a $33.00 price objective on the stock. in a report on Thursday, April 23rd. Finally, Truist Financial upgraded ASGN from a "hold" rating to a "buy" rating and boosted their price objective for the company from $33.00 to $36.00 in a research report on Wednesday, July 22nd. One research analyst has rated the stock with a Buy rating, five have issued a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat.com, ASGN currently has an average rating of "Reduce" and an average target price of $29.83.

Institutional Trading of ASGN

Several large investors have recently made changes to their positions in the company. Parallel Advisors LLC lifted its stake in ASGN by 190.8% in the 4th quarter. Parallel Advisors LLC now owns 1,390 shares of the company's stock worth $67,000 after purchasing an additional 912 shares in the last quarter. Horizon Investments LLC purchased a new stake in shares of ASGN in the 3rd quarter valued at $515,000. Russell Investments Group Ltd. increased its stake in ASGN by 96.9% during the third quarter. Russell Investments Group Ltd. now owns 30,497 shares of the company's stock worth $1,444,000 after purchasing an additional 15,011 shares during the period. Finally, New South Capital Management Inc. increased its stake in ASGN by 39.2% during the 4th quarter. New South Capital Management Inc. now owns 635,011 shares of the company's stock worth $30,588,000 after buying an additional 178,895 shares during the period. 95.36% of the stock is currently owned by hedge funds and other institutional investors.

About ASGN

ASGN is a provider of professional services that connects skilled talent with organizations seeking technology, digital, creative and engineering expertise. The firm focuses on staffing and workforce solutions, delivering contract and permanent placement services as well as project-based consulting and managed services to support clients’ technical and operational needs.

Its offerings commonly include IT consulting, digital transformation support, application development and maintenance, data and analytics, cybersecurity, cloud services and engineering resources.

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