NSP · Insperity
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $46
Note written ·
How this view changed
- · Rating raised from Low to Medium. Results, 29 October 2026: Insperity's third-quarter 2026 report showed adjusted EBITDA of $31 million and raised the floor of full-year adjusted EBITDA guidance to $194 million from $185 million, easing the guidance risk J Capital had raised.
Price against the kill line
9.7% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $46.00, on record since 11 November 2026. The shares are up 1.2% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $46, under the early-October closes of $46.42 and $46.48 and the $47.01 price reported after the 29 October 2026 results. Fourth-quarter adjusted EBITDA reported below the $24 million low end of guidance would also break the case.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,651
- Revenue, change on a year (%)
- +1.7
- Gross margin (%)
- 12.5
- Operating margin (%)
- −0.1
- Free cash flow, four quarters ($M)
- 197
- Net cash, cash less debt ($M)
- 180
- Price to earnings (×)
- 641.0
- Enterprise value to sales (×)
- 0.3
All filed numbers
What Insperity reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,651 | +1.7 | 12.5 | −0.1 |
| first filed | 1,686 | +1.7 | 12.9 | 0.4 |
| first filed | 1,895 | +1.7 | 15.9 | 3.3 |
| first filed | 1,668 | +3.4 | 10.3 | −2.8 |
| first filed | 1,623 | +4.0 | 12.0 | −1.5 |
| first filed | 1,658 | +3.3 | 13.4 | −0.4 |
| Pre-tax income ($M) | −1.0 |
| Net income ($M) four quarters: 3.0 | −1.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | 0.0 |
| Operating cash flow ($M) | 232 |
| Capital spending ($M) | 35.0 |
| Free cash flow ($M) | 197 |
| Cash and short-term investments ($M) | 599 |
| Debt ($M) non-current long-term debt | 419 |
| Net cash, cash less debt ($M) | 180 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) at 31 December 2025, filed 11 February 2026 | 6.0 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 44.0 |
| Market value ($M) | 1,923 |
| Enterprise value, market value plus net debt ($M) | 1,743 |
| Enterprise value to sales (×) | 0.3 |
| Enterprise value to operating income (×) | 87.2 |
| Price to earnings (×) | 641.0 |
| Price to book value (×) | 43.7 |
| Free-cash-flow yield (%) | 10.2 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.8% of shares outstanding sold short, 8.3 days of average trading to cover, +1.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $15.7M | $0 |
The thesis
Insperity's margin recovery gained support on 29 October 2026, when the company raised the floor of its 2026 adjusted EBITDA guidance to $194 million from $185 million. EBITDA is earnings before interest, taxes, depreciation and amortization. A fourth-quarter outlook below analyst estimates and $420 million of credit-facility borrowings keep the case open until the fourth-quarter report, expected around February 2027.
Adjusted EBITDA was $31 million, inside the guided $14–41 million range, and full-year guidance narrowed to $194–214 million from $185–225 million. Average paid worksite employees were 307,265, inside the guided 305,500–307,500 range.
The market reacted to the outlook. StockStory reported the shares fell 8.7% to $47.01 in the afternoon of 29 October 2026 because fourth-quarter adjusted earnings per share (EPS) guidance of $0.07–$0.42 sat below the $0.25 analyst estimate. The shares closed at $50.87 on 10 November 2026, 6.6% below the 52-week high of $54.44, so most of that drop has been recovered.
The story is well known: the J Capital Research challenge and the third-quarter report are both absorbed, and the next company-specific event is management's 17 November 2026 conference appearance.
Bullish and bearish views on Insperity, Inc
The bull case on Insperity, Inc (NSP), in brief: the profit floor moved up. The bear case: the fourth-quarter outlook disappointed.
Bull case
- The profit floor moved up. Full-year adjusted EBITDA guidance of $194–214 million replaced $185–225 million on 29 October 2026. StockStory put the new $204 million midpoint above the $201 million analyst estimate.
- Gross profit turned up. Third-quarter gross profit was $207 million, up 6%, after a 3% decline to $217 million in the second quarter. Revenue rose 2% to $1.651 billion.
- Volume held inside guidance. Average paid worksite employees were 307,265 in the third quarter, down 2% year over year but within the range issued on 29 July 2026. The company guides the fourth quarter to 306,000–308,000.
- Earnings recovered from a low base. Nine-month adjusted EBITDA was $170 million, up 18%, and nine-month adjusted EPS was $1.85, up 13%, per the 29 October 2026 release.
- Analyst targets bracket the price. Investing.com listed an average target of $51.75 from four analysts, and Baird rated the shares hold with a $56 target on 31 July 2026. MarketBeat's average target was $53.33 on 7 October 2026. The close on 10 November 2026 was $50.87.
Bear case
- The fourth-quarter outlook disappointed. Adjusted EPS guidance of $0.07–$0.42 compared with a $0.25 analyst estimate, and fourth-quarter adjusted EBITDA guidance is $24–44 million. Full-year adjusted EPS guidance of $1.93–$2.28 compared with a $2.11 estimate.
- Health-benefit costs keep rising. Benefits cost per covered employee rose 4% in the third quarter and 5% year to date. Accrued health insurance costs were $69 million at 30 September 2026, against $30 million at year-end 2025.
- Borrowing is sizeable. Credit-facility borrowings were $420 million and adjusted cash was $119 million at 30 September 2026. Nine-month dividends were $69 million and capital expenditures $26 million, which is the area J Capital Research targeted on 1 October 2026.
- Volume is shrinking year over year. Third-quarter average paid worksite employees fell 2%, and nine-month volume was down 1% to 305,359. Revenue growth of 2% came from pricing, with revenue per worksite employee up 4% according to company commentary reported by secondary sources.
- Last year's third-quarter reaction was severe. StockStory reported the shares fell 25.7% after the third-quarter 2025 report, when full-year guidance was cut.
- Analyst opinion remains cool. MarketBeat described the consensus as reduce on 7 October 2026, and its 13 July 2026 average target was $46.00, below the current price.
Price setup
The shares closed at $50.87 on 10 November 2026, per adjusted daily closes. The 52-week high is $54.44, set in October 2026, and the 14-day relative strength index (RSI) was 51.2. The three-month price change was negative 4.3%.
The early-October closes of $46.42 (6 October 2026) and $46.48 (2 October 2026) followed J Capital's report. The $47.01 afternoon price on 29 October 2026 sat just above them. A close below $46 would take the shares under all three prices.
Crowding evidence is limited. Sell-side coverage is thin, no insider sales appear in the company news, and the last known insider transaction is the CEO's 3 June 2026 purchase. Retail attention is not visible in the available data. The nearest scheduled earnings date is about three months away.
Catalysts ahead
- 17 November 2026: CEO Paul Sarvadi and CFO Jim Allison speak at the J.P. Morgan Ultimate Services Investor Conference, 3:20 p.m. ET. Management commentary on healthcare costs, worksite-employee growth and the Q4 guide is the next company-specific information after the report.
- ~February 2027, est.: Fourth-quarter and full-year 2026 results (last year's report came on 10 February 2026). Settles whether full-year adjusted EBITDA lands inside $194-214 million and whether Q4 reaches the $24-44 million guide.
What would change the view
A daily close below $46, under the early-October closes of $46.42 and $46.48 and the $47.01 price reported after the 29 October 2026 results. Fourth-quarter adjusted EBITDA reported below the $24 million low end of guidance would also break the case.
The risks this note tracks, each with what would confirm it:
- Fourth-quarter profit falls short of guidance because health-benefit costs run above pricing. Confirmed by: Q4 adjusted EBITDA below $24 million, or a further rise in benefits cost per covered employee above the 4% reported for Q3.
- Cash generation does not cover capital spending and the $2.40 annual dividend, as J Capital argued, and borrowing rises. Confirmed by: credit-facility borrowings rising above the $420 million reported at 30 September 2026 while dividends of $69 million (nine months) continue.
- Worksite-employee volume slips below the Q4 guide. Confirmed by: Q4 average paid worksite employees below 306,000, versus 307,265 in Q3.
- A pattern of weak fourth-quarter guidance repeats the 2025 reaction. Confirmed by: shares closing below $46 after management commentary at the 17 November 2026 conference or in a later filing.
What it trades with
Insperity's profit depends on health-benefit cost inflation, which the company passes through to clients with a lag. Its volume depends on employment levels at small and mid-sized businesses. Both move independently of the technology-led growth trades. Debt-funded dividends make the shares sensitive to borrowing costs on its credit facility. No current theme carries the name, so its moves are driven mainly by its own reports and guidance.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $1.651 billion, up 2%; gross profit was $207 million, up 6%; adjusted EBITDA was $31 million, up 210%; net loss was $1 million; adjusted EPS was $0.22. Insperity Q3 2026 results release via Business Wire · as of
- Third-quarter average paid worksite employees were 307,265, down 2% year over year and inside the 305,500-307,500 guided range. Insperity Q3 2026 results release via Business Wire · as of
- Full-year 2026 adjusted EBITDA guidance is $194-214 million, narrowed from $185-225 million; adjusted EPS guidance is $1.93-2.28, narrowed from $1.88-2.43. Insperity Q3 2026 results release; company news · as of
- Fourth-quarter guidance: adjusted EBITDA $24-44 million, adjusted EPS $0.07-0.42 versus a $0.25 analyst estimate, average worksite employees 306,000-308,000. Insperity Q3 2026 results release; company news · as of
- Insperity shares fell 8.7% in the afternoon session after the report, to $47.01, which StockStory attributed to fourth-quarter EPS guidance below estimates. StockStory · as of
- Benefits cost per covered employee rose 4% in Q3 and 5% year to date; accrued health insurance costs were $69 million versus $30 million at year-end 2025. Insperity Q3 2026 results release · as of
- Nine-month 2026 dividends paid were $69 million and capital expenditures $26 million; borrowings under the credit facility were $420 million and adjusted cash was $119 million. Insperity Q3 2026 results release · as of
- Shares closed at $50.87, 6.6% below the 52-week high of $54.44, on split/dividend-adjusted daily closes. Adjusted daily closes · as of
Sources
- Insperity Announces Third Quarter Results · investor.wedbush.com ·
- StockStory ·
- Finviz
- Insperity Inc (NSP) · uk.investing.com