ASGN - Embedded Expectations Analysis - 2019 06 26
ASGN Incorporated (ASGN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.8x Uniform P/E, implying bearish expectations for the firm. However, management is excited about the durability of their profit margin, and confident in their first quarter performance, billable day basis growth, and the strength of their end markets.Specifically, management generated an excitement marker when saying the durability of their profit margin is based on the way they run their business. In addition, they are confident in their first quarter performance, the historical growth of Stanley, and their ability to sustain growth on a billable day basis. Moreover, they are confident in the strength of their markets and their ability to benefit from growth in the services industry.
Given management's positive sentiment, market expectations for Uniform ROA compression appear far too bearish, and as such, multiple expansion and equity upside continue to be warranted.
ASGN provides information technology (IT) and other services in the technology, digital, creative, engineering and life sciences fields across commercial and government sectors. The company's segments are: Apex, which provides technical, digital, creative, scientific and engineering personnel for contract, contract-to-hire, and permanent placement positions to clients across the United States and Canada; Oxford, which provides staffing and permanent placement services in select skill and geographic markets in the United States and Europe; and ECS, which delivers solutions in cloud, cybersecurity, artificial intelligence, machine learning, application and IT modernization, science and engineering.
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