ASGN Inc (NYSE: ASGN)

Sector: Technology Industry: Information Technology Services CIK: 0000890564
Market Cap 2.16 Bn
P/B 1.18
P/E 16.53
P/S 0.54
ROIC (Qtr) 6.21
Div Yield % 0.00
Rev 1y % (Qtr) -1.90
Total Debt (Qtr) 1.17 Bn
Debt/Equity (Qtr) 0.64

About

ASGN Inc., often recognized by its ticker symbol ASGN, operates in the information technology (IT) services and solutions sector, serving both commercial and government entities. The company's operations span across two primary segments: Commercial and Federal Government, with a presence in six industry verticals. These sectors are strategically chosen to ensure balance, strength, and resilience throughout economic cycles. The Commercial Segment, contributing 71.3% to ASGN's consolidated revenues, offers a wide range of IT services and solutions....

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 283.30M exceeds capital expenditure of 42.50M by 6.67x, indicating strong organic growth funding capability.
  • Operating cash flow of 325.80M fully covers other non-current liabilities 239.20M by 1.36x, showing strong long-term stability.
  • Operating cash flow of 325.80M provides solid 0.70x coverage of current liabilities 462.30M, showing strong operational health.
  • Free cash flow of 283.30M provides healthy 0.61x coverage of current liabilities 462.30M, showing strong operational health.
  • Operating cash flow of 325.80M provides strong 5.26x coverage of operating expenses 61.90M, showing operational efficiency.

Bear case

  • Operating cash flow of 325.80M barely covers its investment activities of (348.60M), with a coverage ratio of -0.93, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 126.50M provide limited coverage of acquisition spending of (306.10M), which is -0.41x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 248.30M show weak coverage of depreciation charges of 107.50M, with a 2.31 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 325.80M is outpaced by equity issuance of (135.60M) (-2.40 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 1.11B provide limited buffer against comprehensive income items of (2M), which is -553.60x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Information Technology Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 IBM International Business Machines Corp 279.99 Bn 35.41 4.28 66.57 Bn
2 ACN Accenture plc 168.17 Bn 22.09 2.38 8.20 Bn
3 INFY Infosys Ltd 74.96 Bn 23.74 3.89 -
4 CTSH Cognizant Technology Solutions Corp 41.45 Bn 19.48 1.99 1.17 Bn
5 FIS Fidelity National Information Services, Inc. 35.21 Bn 231.62 3.36 13.00 Bn
6 WIT Wipro Ltd 29.93 Bn 19.70 2.97 1.95 Bn
7 BR Broadridge Financial Solutions, Inc. 26.38 Bn 28.51 3.74 3.28 Bn
8 LDOS Leidos Holdings, Inc. 23.72 Bn 16.88 1.37 5.23 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 1.44
EV to Cash from Ops. EV/CFO 9.92 5.63
EV to Debt EV to Debt 2.77 8.06
EV to EBIT EV/EBIT 13.02 -4.05
EV to EBITDA EV/EBITDA 9.09 -0.52
EV to Free Cash Flow [EV/FCF] EV/FCF 11.41 -1.66
EV to Market Cap EV to Market Cap 1.50 1.35
EV to Revenue EV/Rev 0.81 57.14
Price to Book Value [P/B] P/B 1.18 3.34
Price to Earnings [P/E] P/E 16.53 -5.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.83
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.66
Dividend per Basic Share Div per Share (Qtr) 0.00 0.47
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.24
Interest Coverage Int. cover (Qtr) 3.77 -319.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -36.22 -253.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -24.07 114.15
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 35.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -23.31 -22.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -13.58 -25.03
EBIT Growth (1y) % EBIT 1y % (Qtr) -20.82 -82.44
EBT Growth (1y) % EBT 1y % (Qtr) -26.30 97.07
EPS Growth (1y) % EPS 1y % (Qtr) -25.50 147.29
FCF Growth (1y) % FCF 1y % (Qtr) -26.42 -8,638.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -4.24 -8.24
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.08 0.78
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.27 0.66
Current Ratio Curr Ratio (Qtr) 1.99 2.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.64 0.88
Interest Cover Ratio Int Coverage (Qtr) 3.77 -319.17
Times Interest Earned Times Interest Earned (Qtr) 3.77 -319.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.90 -550.76
EBIT Margin % EBIT Margin % (Qtr) 6.23 -775.74
EBT Margin % EBT Margin % (Qtr) 4.58 -827.89
Gross Margin % Gross Margin % (Qtr) 28.90 24.07
Net Profit Margin % Net Margin % (Qtr) 3.30 -830.34