What Happened?
Shares of HR outsourcing provider Insperity (NYSE: NSP) fell 13.7% in the morning session after the company reported a surprise third-quarter loss and significantly lowered its full-year profit forecast.
For the third quarter, Insperity posted an adjusted loss of $0.20 per share, missing Wall Street's expectation for a profit of $0.22 per share. While revenue of $1.62 billion was roughly in line with estimates, the company's profitability fell far short. Adjusted EBITDA, a key measure of operational profit, came in at just $10 million, a 65% miss compared to the $28.56 million consensus estimate. Looking ahead, management slashed its full-year adjusted earnings guidance to a midpoint of $1.16 per share, a 46.5% decrease, signaling that the profitability challenges are expected to persist.
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What Is The Market Telling Us
Insperity’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Insperity and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 25 days ago when the stock dropped 3.4% on the news that President Trump threatened a 'massive increase in tariffs' on Chinese imports, reigniting fears of a renewed US-China trade war. The unexpected comments, made in response to Beijing's plans to tighten export controls on rare-earth minerals, reversed early market gains and sent major indices tumbling. Rare-earth minerals are crucial for components used in the electronics and automotive industries. The tech sector led the losses, with the tech-rich Nasdaq Composite falling 1.7%. The threat jolted Wall Street, sparking concerns that escalating trade tensions could disrupt global supply chains and increase costs for many technology companies that rely on components or manufacturing from China.
Insperity is down 47.4% since the beginning of the year, and at $39.70 per share, it is trading 57.9% below its 52-week high of $94.21 from March 2025. Investors who bought $1,000 worth of Insperity’s shares 5 years ago would now be looking at an investment worth $458.32.
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