ASGN (ASGN) Margin Compression In Q4 FY 2025 Challenges Bullish Narratives

ASGN (ASGN) has wrapped up FY 2025 with fourth quarter revenue of US$980.1 million and basic EPS of US$0.59, set against trailing twelve month revenue of US$3.98 billion and EPS of US$2.62. Over recent periods, quarterly revenue has ranged from US$968.3 million to US$1.02 billion, while basic EPS has moved between US$0.48 and US$0.96. This gives investors a clear read on how top line scale and per share earnings have tracked into the latest full year. With net profit margins tighter than a year ago, this set of results puts the focus squarely on how sustainable earnings, rather than just revenue, may support the story from here.

See our full analysis for ASGN.

With the latest numbers on the table, the next step is to see how this earnings profile lines up with the main narratives around ASGN, and where the fresh data challenges or supports those views.

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Margins Tighten as Net Profit Falls to US$25.2 Million

• ASGN earned US$25.2 million in net income in Q4 FY 2025 on US$980.1 million of revenue, compared with US$42.4 million on US$985 million a year earlier. This lines up with the move in net margin from 4.3% over the prior year period to 2.9% over the latest trailing twelve months.
• What stands out for a bearish read is that trailing twelve month net income moved from US$175.2 million in Q4 FY 2024 to US$113.5 million in Q4 FY 2025, and
  • bears point to that 2.9% net margin over the last year versus 4.3% the year before as evidence that profitability has been under pressure.
  • critics also refer to the 8.3% annual earnings decline over five years as backing the idea that margin compression is not just a one year blip.

EPS Trend Shows Pressure On Trailing Results

• Basic EPS over the last six reported quarters has ranged from US$0.48 in Q1 FY 2025 up to US$1.07 in Q3 FY 2024. On a trailing twelve month basis it moved from US$4.00 in Q3 FY 2024 to US$2.62 in Q4 FY 2025, which helps explain why the trailing P/E sits at 20x.
• Supporters of a more bullish outlook point to forecast earnings growth of about 20.7% per year against this softer trailing EPS trend, and
  • argue that if earnings follow those forecasts, the current 20x P/E could look less demanding relative to the US IT industry average of 26.1x.
  • at the same time, the current 2.9% net margin and five year earnings decline are a clear check on the view that growth will automatically translate into stronger per share results.

DCF Fair Value Sits Well Above US$53.07 Share Price

• The supplied DCF fair value of US$91.56 is about 42% above the current share price of US$53.07, even though trailing twelve month revenue of roughly US$4.0b and a 20x P/E already capture the recent earnings softness.
• For bullish investors, the combination of that DCF gap and the flagged 20.7% annual earnings growth forecast is a key part of the upside story, and
  • they point out that ASGN trades on a higher P/E than peers at 15.2x but below the broader US IT group at 26.1x, which they see as leaving room if forecasts are met.
  • yet the same data set also highlights high leverage and the margin move from 4.3% to 2.9%, so the bullish case depends on those balance sheet and profitability issues not becoming more of a drag.

Analysts watching these results are weighing that 42% gap to the DCF fair value against the weaker margin and EPS trends, and the differing P/E signals versus peers and the broader IT group, in forming a view on how much of the growth story is already in the price. 📊 Read the full ASGN Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on ASGN's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

ASGN's tighter 2.9% net margin, softer EPS trend and higher leverage show that profitability and balance sheet strength are key pressure points right now.

If those profit and leverage pressures are making you cautious, it could be a good time to check our solid balance sheet and fundamentals stocks screener (46 results) that focus on companies with sturdier financial foundations.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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