3 Reasons to Sell ASGN and 1 Stock to Buy Instead

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  • Mar 20, 2025
3 Reasons to Sell ASGN and 1 Stock to Buy Instead

What a brutal six months it’s been for ASGN. The stock has dropped 27.3% and now trades at $67.80, rattling many shareholders. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Is there a buying opportunity in ASGN, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free .

Even though the stock has become cheaper, we don't have much confidence in ASGN. Here are three reasons why ASGN doesn't excite us and a stock we'd rather own.

Why Do We Think ASGN Will Underperform?

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE:ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

1. Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, ASGN’s sales grew at a tepid 3.7% compounded annual growth rate over the last five years. This was below our standard for the business services sector.

3 Reasons to Sell ASGN and 1 Stock to Buy Instead

2. Projected Revenue Growth Shows Limited Upside

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect ASGN’s revenue to stall. While this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average.

3. EPS Barely Growing

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

ASGN’s EPS grew at an unimpressive 5.1% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 3.7% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

3 Reasons to Sell ASGN and 1 Stock to Buy Instead

Final Judgment

ASGN falls short of our quality standards. Following the recent decline, the stock trades at 12.2× forward price-to-earnings (or $67.80 per share). At this valuation, there’s a lot of good news priced in - we think there are better opportunities elsewhere. We’d suggest looking at an all-weather company that owns household favorite Taco Bell .

Stocks We Would Buy Instead of ASGN

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