EFOR — Everforth, Inc. (formerly ASGN Incorporated) · 2026-09-05 · Verdict: WATCH · Conviction 2

Price $31.83 (screen close, universe_under2b.csv dated 2026-09-04; no live quote available) · Mkt cap $1,305M (41.0M diluted shares, Q2 2026) · EV $2,590M · EV/EBIT 11.2x on the screen's CY2025 GAAP EBIT, about 18.8x on H1 2026 annualized, 6.7x EV/forward four-quarter Adjusted EBITDA · FCF yield 16.9% LTM (derived), 8.5% on H1 2026 annualized · Net debt $1,285.2M, about 3.3x Adjusted EBITDA · ADV $21.5M Sources read: 10-K filed 2026-02-25 for FY2025 (Items 1, 1A, 7), 10-Q filed 2026-07-31 (quarter ended 2026-06-30), DEF 14A filed 2026-04-27, 8-Ks 2026-04-22, 2026-04-24, 2026-06-16, 2026-07-09 and 2026-07-29, Form 4s trailing 12 months. No transcript was in the bundle, so quotes come from the release exhibits.

1. What the business actually does

Everforth is the rebranded ASGN, a $4.0 billion revenue IT services company with two segments (10-K 2025, Item 1). Commercial, 70.1% of 2025 revenue, sells consulting and staffing to Fortune 1000 clients through Apex Systems, Creative Circle, CyberCoders, GlideFast, TopBloc and now Quinnox. Federal Government, 29.9%, is ECS, a prime contractor; federal agencies were 26% of consolidated revenue and no other client exceeded 10%. IT consulting was $2.5 billion, 62.3% of revenue, up 5.1%, while legacy assignment work was $1.5 billion and fell 13.8% (Item 7). The ticker changed from ASGN to EFOR on 2026-04-24 (8-K 2026-04-22).

2. Why it is mispriced: the edge case

There is no edge case I can defend, so the verdict is capped at WATCH.

The rebrand and ticker change is the only structural candidate, and it does not survive the ownership page: BlackRock holds 14.3% (DEF 14A 2026), ADV is $21.5M, and the issuer itself was buying.

The insider cluster is real in headcount and small in money. Eleven insiders bought 76,830 shares for $1,495,015 with zero open-market sales in twelve months, led by CEO Ted Hanson at 51,965 shares (form4_summary.md). That is 0.11% of the market capitalization, every trade was filed between 2026-04-27 and 2026-04-29, and directors and officers as a group own 3.2% (DEF 14A 2026). The Form 4s report prices of $18.70 to $22.67 in late April, while the company disclosed repurchasing stock in the same quarter at an average of $30.07 (8-K 2026-07-29). Those two disclosures cannot both describe the same tape, so I will not underwrite the "insiders bought far below today's price" reading as fact.

The mix story, consulting compounding underneath a shrinking assignment base, is printed in the proxy letter ("63 percent of total revenues", up from 58%) and was the subject of a November 2025 Investor Day. Disclosed, not hidden.

3. Unit economics and growth

Revenue fell 2.9% in 2025 to $3,980.4M and 0.7% in H1 2026 to $1,975.3M. Gross margin held at 28.9% in 2025 but compressed to 27.9% in H1 2026, Commercial down 120bp on a weaker mix of permanent placement work and Mexico FX (10-Q). Adjusted EBITDA fell from $202.1M to $180.3M in H1 (8-K 2026-07-29); margin went 9.7% to 8.6% in Q1 and 10.6% to 9.6% in Q2. GAAP operating income fell 35%, $106.2M to $68.8M, and net income from $50.2M to $19.7M.

Cash conversion deteriorated more than earnings. H1 2026 free cash flow was $55.4M against $122.4M, a 55% fall, on higher receivable days sales outstanding (10-Q, Liquidity). LTM free cash flow derived from the quarterly disclosures is about $221M against the $288.1M CY2025 figure the screen used. Federal new contract awards on a trailing twelve month basis fell from $1,363.6M to $926.2M, a 0.8 book-to-bill, and backlog from $2,924.7M to $2,670.7M. Commercial consulting book-to-bill of 1.4 in Q2 and 1.2 TTM is the one improving series.

4. Balance sheet and capital allocation

At 2026-06-30: cash $152.9M and long-term debt $1,438.1M, being Term Loan A $97.5M, Term Loan B $486.3M due 2030, $550M of 4.625% notes due 2028, and about $316M drawn on the revolver (8-K 2026-07-29). Net debt of $1,285.2M is up from about $1,008M at year end, the increase funding the $283.6M Quinnox purchase. July's refinancing upsized the revolver to $600M through 2031, called "leverage neutral" (8-K 2026-07-09). Equity of $1,805.1M sits against $2,876.0M of goodwill and intangibles, so tangible book is about negative $1.07 billion.

Diluted shares fell 6.8%, 44.0M to 41.0M, and $923M of the $1 billion November 2025 authorization remains, 71% of the market cap. But only $50.5M was spent in H1 while $269.2M was borrowed, and $39.0M of that went out in Q1 at an average $47.69 (8-K 2026-04-22) against $31.83 today.

5. Management: what they said versus what they did

The proxy is candid, and the record it discloses is three years of missing plan: 2024 targets achieved at 45.7% for Adjusted EBITDA and 61.7% for revenue, the 2023 three-year PSUs ending 2025 "achieved at zero percent", and 2025 cash bonuses below target (DEF 14A 2026). Pay is aligned; the plan keeps being missed.

On 2026-07-09 the CEO cited "the durability of our free cash flow generation"; twenty days later H1 free cash flow was reported down 55%. Q1 SG&A carried $12.8M of acquisition and strategic planning costs "which were not included in the Company's previously-announced guidance estimates" (8-K 2026-04-22), and the Q3 guide repeats it: guided net income of $14.5M to $23.0M excludes $7.5M to $9.5M of those costs, so guided GAAP net income is really about $9M to $16M. Against that, Q2 was a clean beat: revenue $1,007.0M on a $970-1,000M guide, Adjusted EBITDA $96.7M on $85-95M.

6. Valuation

Forward four-quarter Adjusted EBITDA of about $388M (Q4 2025 $107.9M, Q1 2026 $83.6M, Q2 2026 $96.7M, Q3 guide midpoint $100M) puts EV at 6.7x and net debt at 3.3x.

Bear (30%): revenue declines 3% a year, margin settles at 8.5%, 2027 Adjusted EBITDA $330M, 5.5x, equity $530M, $12.90. Base (45%): revenue flat, Adjusted EBITDA holds near $385M, receivables normalize, 7x, equity $1,410M, $34.40. Bull (25%): revenue grows 4%, margin reaches 10.5%, 2028 Adjusted EBITDA $450M, 8x, net debt paid to $1.1B on 38M shares, $65. Probability-weighted $34.60, about 9% above price. With net debt roughly equal to market cap, one turn of multiple is about $9.50 of equity value.

Reverse DCF: at $31.83 the EV is $2,590M, and 2026 unlevered free cash flow of roughly $166M (H1 annualized plus after-tax interest) discounted at 9% implies the price pays for about 2.6% perpetual growth, roughly inflation, from a business whose revenue has fallen three years running. On LTM cash flow the same arithmetic implies a 1.7% perpetual decline. Cheap on last year, fair on this year.

7. Catalysts and timeline

Q3 2026 results in late October, guided to $994-1,024M revenue and $95-105M Adjusted EBITDA. H2 cash conversion, since the entire FCF shortfall is receivables. Whether the $923M authorization is used at $31.83 or left idle for the next tuck-in. Federal book-to-bill recovering through 1.0.

8. Risks and pre-registered kill criteria

Risks: AI cuts both ways, and the company says so, warning clients "may develop their own internal AI-related capabilities, which could lead to reduced demand for our services" (10-K 2025, Item 1A). Federal is 26% of revenue with disclosed DOGE losses and shutdown risk, and covenants are tied to operating results while leverage rose to fund M&A.

Kill criteria: 1. Commercial IT consulting TTM book-to-bill below 1.1 for two consecutive quarters. 2. Federal contract backlog below $2.5B at any quarter end (from $2,670.7M at 2026-06-30). 3. LTM free cash flow below $150M (about $221M at 2026-06-30). 4. Net debt above $1.4B, or another debt-funded acquisition announced while the $923M authorization sits unused.

9. Verdict and one-paragraph summary

WATCH, conviction 2. Everforth's screen statistics are stale in the direction that flatters it: the 22.1% FCF yield is CY2025 arithmetic against an LTM 16.9% and an H1 2026 run-rate of 8.5%, and the 11.2x EV/EBIT becomes about 18.8x on annualized H1 GAAP operating income. The business is 70% commercial IT services, where consulting grew 14.4% in 2025 while assignment fell 13.8%, and 30% federal, where trailing book-to-bill is 0.8 and backlog is down $254M year over year. There is no forced seller and no edge case: the insider cluster is eleven buyers but only $1.5 million, all filed in one week in late April, at Form 4 prices that contradict the company's own disclosed $30.07 average repurchase price for the same quarter. What you buy at $31.83 is a levered stub, $1.29 billion of net debt against a $1.31 billion market cap and negative tangible book, run by managers who borrowed $269 million for Quinnox while spending $50 million of a $923 million buyback, $39 million of it at $47.69. Probability-weighted value of about $34.60 is 9% above price, not enough for 3.3x leverage on a shrinking revenue line.

Research for discussion, not investment advice. Positions and sizing are the reader's decision.