ASGN - Embedded Expectations Analysis - 2021 03 12
ASGN Incorporated (ASGN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 17.9x Uniform P/E, implying bearish expectations for the firm. However, given management's confidence about the Apex segment, adjusted EBITDA margin improvement, and rising bill rates, market expectations are overly bearish and equity upside is likely warrantedSpecifically, management is confident bill rates are increasing, commercial consulting revenues grew 19% year-over-year, and adjusted EBITDA margin is at its highest since Q3 2019. In addition, they are confident the Apex segment can service clients across multiple commercial end markets
Given management's confidence about the Apex segment, adjusted EBITDA margin improvement, and rising bill rates, market expectations are overly bearish and equity upside is likely 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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