Barrett Business Services (BBSI) AI Stock Analysis

• Market Cap: $1.03B
• Dividend Yield: 0.79%
• Average Volume (3M): 151.88K
• Price to Earnings (P/E): 20.1
• Beta (1Y): 0.79
• Revenue Growth: 7.03%
• EPS Growth: 7.75%
• Country: US
• Employees: 135,727
• Sector: Industrials
• Sector Strength: 70
• Industry: Staffing & Employment Services
• EPS (TTM): 1.99
• Shares Outstanding: 25,833,117
• 10 Day Avg. Volume: 174,672
• 30 Day Avg. Volume: 151,875
• PEG Ratio: 2.59
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.92
• Price to Cash Flow (P/CF): 4.90
• P/FCF Ratio: 5.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $45.00
• Price Target Upside: 12.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Barrett Business Services is performing well with strong revenue growth, profitability, and strategic initiatives that enhance client satisfaction. The main risk is cash flow management, which could impact future growth if not addressed. Valuation is fair, and technical indicators suggest a stable long-term outlook, contributing to a solid overall stock score.

Positive Factors

Earnings Per Share

The company reported Q4/24 EPS of $0.63, which exceeded the forecast and the FactSet consensus forecast.

Market Expansion

The company expands in new geographies through its asset light model, with 20 new markets largely achieving management’s goals.

Revenue Performance

The company reported total revenue of $304.8 million, which exceeded the forecast and the FactSet consensus forecast by 3%.

Negative Factors

Growth Challenges

Worksite employee growth has been driven by strong new client additions from internal lead generation and more modest existing client net hiring, indicating potential growth challenges.

Market Competition

The company is targeting the large and underpenetrated professional employer organization (PEO) services market in the U.S., which involves competitive pressures.

Barrett Business Services Business Overview & Revenue Model

Company Description

Barrett Business Services, Inc. provides business management solutions for small and mid-sized companies in the United States. The company develops a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry. It offers professional employer services under which it enters into a client services agreement to establish a co-employment relationship with each client company, assuming responsibility for payroll, payroll taxes, workers' compensation coverage, and other administration functions for the client's existing workforce. The company also provides staffing and recruiting services, such as on-demand or short-term staffing assignment, contract staffing, direct placement, and long-term or indefinite-term on-site management services. It serves electronics manufacturers, light-manufacturing industries, agriculture-based companies, transportation and shipping enterprises, food processors, telecommunications companies, public utilities, general contractors in various construction-related fields, and professional services firms. The company was incorporated in 1965 and is headquartered in Vancouver, Washington.

How the Company Makes Money

BBSI generates revenue primarily through its Professional Employer Organization (PEO) services, where it enters into co-employment agreements with client companies. This involves managing payroll, benefits, and human resources administration, for which BBSI charges a fee based on the payroll of the client's employees. Additional revenue streams include consulting fees from providing business management and operational support services. The company also leverages partnerships with insurance carriers to offer risk management and workers' compensation programs, which contribute to its earnings.

Barrett Business Services Financial Statement Overview

Summary

Barrett Business Services shows strong revenue growth and profitability, supported by a stable balance sheet with low leverage and high ROE. However, cash flow management presents concerns with negative free cash flow, indicating a need for improved cash conversion processes.

Income Statement

Barrett Business Services showed strong income statement performance, with consistent revenue growth over recent years, including a 7.04% revenue growth in the latest year. The gross profit margin is healthy at 22.13%, and the net profit margin also stands robust at 4.63%. The company maintains solid EBIT and EBITDA margins at 5.22% and 6.84% respectively, indicating efficient cost management and profitability.

Balance Sheet

The company's balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.10, suggesting minimal leverage and financial risk. Return on Equity (ROE) stands at a solid 23.93%, indicating efficient use of equity to generate profits. The equity ratio is moderate at 29.69%, showing a balanced capital structure.

Cash Flow

Cash flow analysis shows mixed results. While the operating cash flow to net income ratio is low at 0.19, indicating potential issues in converting income into cash, the free cash flow situation is challenging with a negative free cash flow of -$4.07 million. This suggests that cash management could be improved to support business operations and growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.14B	1.07B	1.05B	955.17M	880.82M
	Gross Profit
253.25M	242.53M	234.84M	204.51M	182.91M
	EBIT
59.78M	60.65M	58.98M	43.92M	36.15M
	EBITDA
78.25M	76.26M	78.63M	64.40M	55.93M
	Net Income Common Stockholders
52.99M	50.61M	47.27M	38.08M	33.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
153.06M	152.19M	159.75M	166.17M	169.93M
	Total Assets
745.51M	721.54M	686.94M	746.95M	774.95M
	Total Debt
21.45M	21.21M	21.18M	25.30M	27.69M
	Net Debt
-33.92M	-49.95M	-70.24M	-44.11M	-41.00M
	Total Liabilities
524.10M	522.40M	509.10M	538.42M	576.72M
	Stockholders Equity
221.40M	199.14M	177.84M	208.53M	198.24M
Cash Flow		Free Cash Flow
-4.07M	55.40M	11.80M	-22.26M	-36.52M
	Operating Cash Flow
10.09M	67.22M	27.78M	-15.46M	-27.91M
	Investing Cash Flow
38.78M	-55.19M	61.15M	-112.86M	4.14M
	Financing Cash Flow
-41.13M	-44.57M	-60.18M	-26.89M	-15.73M

Barrett Business Services Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 40.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBSI, the sentiment is Neutral. The current price of 40 is below the 20-day moving average (MA) of 40.54, below the 50-day MA of 40.74, and above the 200-day MA of 38.92, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 47.58 is Neutral, neither overbought nor oversold. The STOCH value of 55.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BBSI.

Barrett Business Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSP	77 Outperform	$3.17B	35.55	95.48%	2.82%	1.47%	-45.91%
BBSI	75 Outperform	$1.03B	20.08	25.20%	0.79%	7.03%	7.75%
KFY	74 Outperform	$3.33B	13.85	13.92%	2.48%	-3.27%	62.57%
Sector *	62 Neutral	$7.70B	13.14	3.53%	3.32%	3.90%	-14.25%
KFRC	61 Neutral	$870.89M	17.00	32.14%	3.36%	-8.26%	-14.80%
TNET	61 Neutral	$3.86B	23.04	235.37%	1.27%	1.67%	-47.56%
KELYA	56 Neutral	$399.53M	11.43	-0.05%	2.61%	-10.42%	-101.51%

Barrett Business Services Corporate Events

Barrett Business Services Appoints New Board Member

On April 7, 2025, Barrett Business Services, Inc. appointed Mark S. Finn to its Board of Directors, with his tenure effective immediately. Finn, who has an extensive background in finance from his 30-year career at T. Rowe Price Group, is expected to bring valuable strategic insights to BBSI as it navigates its next phase of growth and innovation. His appointment is seen as a positive step towards strengthening the company’s leadership and ensuring long-term success.

Spark’s Take on BBSI Stock

According to Spark, TipRanks’ AI Analyst, BBSI is a Outperform.

Barrett Business Services demonstrates robust financial growth, strategic initiatives, and positive market sentiment, driving a strong overall score. The company’s efficient revenue generation and client satisfaction are notable strengths, although cash flow management and regional growth challenges need attention. Valuation is fair, with technical indicators supporting positive momentum.

To see Spark’s full report on BBSI stock, click here.

Barrett Business Services Reports Strong Q4 2024 Results

On February 26, 2025, Barrett Business Services announced a strong financial performance for the fourth quarter and full year of 2024, with a 10% increase in both revenue and gross billings in the fourth quarter, driven by new client additions and high client retention. The company also declared a regular quarterly cash dividend of $0.08 per share, payable on March 28, 2025, reflecting continued confidence in its growth trajectory and commitment to returning capital to shareholders.