ASGN - Embedded Expectations Analysis - 2021 12 01
ASGN Incorporated (ASGN) currently trades near corporate yet above historical averages relative to Uniform earnings, with a 21.3x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to maintain 36% levels, accompanied by 7% Uniform asset growth.
Meanwhile, analysts expect Uniform ROA to expand to 41%, accompanied by 2% Uniform asset shrinkage.
Given the firm's strong economic moat and secular growth drivers, there is potential for stronger-than-priced-in performance.
If the company can capitalize on its tailwinds and strategy, it could drive 55% Uniform ROA and 12% Uniform asset growth going forward, which would imply a stock price closer to $251, representing significant potential equity upside for the firm.
However, the firm's most recent earnings call suggests management may have concerns about margins, growth, and M&A.
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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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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