1. Executive Summary
- Company: ASGN Incorporated
- Ticker: ASGN
- Industry: Information Technology Services
- Exchange: NYSE
- Investment Rating: Hold
ASGN Incorporated is a leading provider of IT and professional services, offering solutions across technology, digital, creative, engineering, and life sciences sectors. Despite a decline in revenue and earnings in 2024, the company maintains a solid market position with a diversified client base. Analysts have a consensus rating of “Hold,” reflecting cautious optimism about the company’s future performance.
2. Company Overview
- Business Model: Provides IT and professional services, including consulting, creative digital marketing, and permanent placement services.
- Industry Position: Operates through two segments: Commercial and Federal Government, serving clients in the U.S., Canada, and Europe.
- Key Services: IT consulting, digital solutions, creative services, and staffing solutions.
- Leadership: CEO Ted Hanson has been leading the company since 2019, focusing on strategic growth and operational efficiency.
3. Financial Analysis
- Revenue:
- 2024: $4.10 billion, a decrease of 7.88% from 2023.
- Net Income:
- 2024: $175.2 million, a decrease of 20.11% from the previous year.
- Earnings Per Share (EPS):
- 2024: $4.44.
- Balance Sheet:
- Total Assets: $2.3 billion.
- Debt: $1.1 billion in long-term debt.
- Cash Flow:
- Operating Cash Flow: $452 million.
4. Stock Performance
- Current Price: $53.26 (as of June 7, 2025).
- 52-Week Range: $47.64 – $105.67.
- Market Capitalization: Approximately $2.3 billion.
- Beta: 1.17, indicating moderate volatility.
5. Valuation Analysis
- Price-to-Earnings (P/E) Ratio: 13.76.
- Price-to-Sales (P/S) Ratio: 0.6.
- Price-to-Book (P/B) Ratio: Not specified.
- Discounted Cash Flow (DCF) Analysis: Intrinsic value estimated at $113.61, suggesting the stock is undervalued by approximately 53%.
- Peer Comparison: ASGN’s P/E and P/S ratios are lower than industry averages, indicating potential undervaluation.
6. Industry & Market Analysis
- Industry Trends: Growing demand for IT and digital transformation services across various sectors.
- Market Share: ASGN holds a significant position in the IT staffing and solutions market, with a diversified client base.
- Macro Factors: Economic conditions, labor market dynamics, and technological advancements influence demand for ASGN’s services.
7. Risk Analysis
- Market Risk: Economic downturns could reduce demand for IT services.
- Financial Risk: High debt levels may impact financial flexibility.
- Regulatory Risk: Changes in labor laws and regulations could affect operations.
- Geopolitical Risk: International operations expose the company to geopolitical uncertainties.
8. Growth Catalysts
- Digital Transformation: Increasing demand for digital solutions presents growth opportunities.
- Federal Contracts: Expansion in government services could drive revenue growth.
- Strategic Acquisitions: Potential acquisitions may enhance service offerings and market reach.
- Talent Management: Investments in talent acquisition and retention can strengthen competitive advantage.
9. Analyst Sentiment
- Consensus Rating: Hold.
- Price Target: Average of $71.33, with a high of $104 and a low of $54.
- Recent Developments: Analysts have adjusted price targets downward due to recent financial performance, but maintain a neutral outlook.
10. Conclusion
ASGN Incorporated remains a key player in the IT services industry, with a strong market presence and diversified offerings. While recent financial performance has been challenging, the company’s strategic initiatives and market opportunities provide a foundation for potential recovery. Investors may consider a Hold position, monitoring future earnings reports and market developments for signs of improvement.