Update (9:38 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- Jefferies increased its target price on On Assignment (ASGN) to $42 and set a "buy" rating. The firm noted the company is pushing into high margin perm recruiting biz with strong management track record capable of delivering long-term targets.
The stock was up 0.71% to $36.77 at 9:37 a.m. on Friday.
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Separately, TheStreet Ratings team rates ON ASSIGNMENT INC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate ON ASSIGNMENT INC (ASGN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 33.33% and other important driving factors, this stock has surged by 51.05% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ASGN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ON ASSIGNMENT INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ON ASSIGNMENT INC increased its bottom line by earning $1.00 versus $0.78 in the prior year. This year, the market expects an improvement in earnings ($1.47 versus $1.00).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 128.2% when compared to the same quarter one year prior, rising from $14.21 million to $32.41 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.3%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, ASGN has a quick ratio of 1.90, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: ASGN Ratings Report