When Should You Buy Insperity, Inc. (NYSE:NSP)?

Insperity, Inc. (NYSE:NSP), which is in the professional services business, and is based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Insperity’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Insperity

What is Insperity worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.5% above my intrinsic value, which means if you buy Insperity today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $112.24, there’s only an insignificant downside when the price falls to its real value. What’s more, Insperity’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Insperity generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Insperity’s earnings over the next few years are expected to increase by 60%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? NSP’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on NSP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Insperity. You can find everything you need to know about Insperity in the latest infographic research report. If you are no longer interested in Insperity, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at [email protected]. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.