July 3, 2018

ASGN – Market expectations are for declining Uniform ROA, and management has concerns about free cash flow, growth, and margins


  • ASGN Incorporated (ASGN:USA)currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 22.3x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about free cash flow, growth, and margins
  • Specifically, management may lack confidence in the sustainability of free cash flow improvements, and may have concerns about their ability to meet their ECS growth guidance. Furthermore, they may have concerns about their revenue visibility, and may lack confidence in the sustainability of gross margin expansion driven by a higher mix of higher-margin business
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