Should you invest in ManpowerGroup stock as shares plunge after Q3 results?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Oct 19, 2021
  • ManpowerGroup shares on Tuesday plummeted more than 7% after announcing its fiscal Q3 result.
  • The company reported its most recent quarterly results before markets opened, beating analyst estimates.
  • However, the company’s revenue for the quarter fell short of expectations.

On Tuesday, ManpowerGroup Inc. (NYSE:MAN) shares fell by more than 7% after announcing its most recent quarterly results. The company reported its fiscal Q3 earnings per share before markets opened, beating Street estimates. However, its revenue for the period failed to match expectations, despite posting double-digit annual growth.

The company posted an FQ3 non-GAAP EPS of $1.93, beating the average for analyst estimates of $1.91. On the other hand, its GAAP EPS of $1.77 failed to match the estimate of $1.89, while revenue for the quarter grew by 11.7% from the same quarter a year ago to $5.14 billion, $160 million below expectations.

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ManpowerGroup shares are still up nearly 17% this year and more than 45% over the last 12 months despite its post-earnings decline.

ManpowerGroup looks undervalued

From a valuation perspective, ManpowerGroup shares trade at an attractive forward P/E ratio of 12.89, making the stock a compelling option for value investors.

Moreover, analysts expect its earnings per share to grow by 20.77% next year and at an average annual rate of 33.30% over the next five years. Therefore, the stock could also gain the attention of growth investors.

In addition, ManpowerGroup pays dividends at an attractive forward yield of 2.41, potentially putting it on the radar of dividend investors.

Source – TradingView

Technically, ManpowerGroup shares seem to be trading within a gently descending channel formation in the intraday chart. 

Tuesday’s sharp decline pushed the stock price closer to the oversold conditions of the 14-day RSI, creating a perfect opportunity for a rebound.

Therefore, investors could target profits at about $113.79, or higher at $124.11, while $95.29 and $85.94 are crucial support zones.

The pullback could be an opportunity

In summary, although MAN shares declined after its most recent quarterly report, the impact of the revenue miss may be overblown, with sales coming in just 3.07% below estimates.

Moreover, the company trades at compelling valuation multiples whilst offering exciting growth prospects. Therefore, with shares trading close to oversold conditions the pullback could be an opportunity to buy.

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