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Barrett Business Services
(NASDAQ:BBSI)
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Rating:70Outperform
Price Target:
$44.00
▲(10.72% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by solid underlying financial strength (notably a conservative balance sheet) and favorable technical trend/momentum. It is tempered by recently weaker margins and inconsistent cash-flow conversion, plus a valuation that is not especially cheap and an earnings outlook that remains cautious as 2026 is guided as a transition year for margins.
Positive Factors
Conservative Balance Sheet
Low leverage and a meaningful equity base provide durable financial flexibility for a PEO exposed to insurance and claims volatility. With negligible debt and strong equity history, BBSI can fund working capital, claims volatility, buybacks and investments without stressing liquidity over the next 2–6 months.
Negative Factors
Workers' Comp Margin Pressure
Workers' compensation spreads are a core profitability driver for BBSI. Higher claim severity and the monthly timing lag for pricing to pass through mean margins can remain depressed for several quarters. This structural exposure can compress earnings and slow margin recovery into 2027 if claims persist.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Low leverage and a meaningful equity base provide durable financial flexibility for a PEO exposed to insurance and claims volatility. With negligible debt and strong equity history, BBSI can fund working capital, claims volatility, buybacks and investments without stressing liquidity over the next 2–6 months.
Read all positive factors
Barrett Business Services (BBSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$958.81M
Dividend Yield0.82%
Average Volume (3M)253.93K
Price to Earnings (P/E)24.7
Beta (1Y)0.71
Revenue Growth7.12%
EPS Growth-21.18%
CountryUS
Employees141,802
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)1.39
Shares Outstanding24,559,649
10 Day Avg. Volume287,688
30 Day Avg. Volume253,932
Financial Highlights & Ratios
PEG Ratio3.45
Price to Book (P/B)3.81
Price to Sales (P/S)0.74
P/FCF Ratio19.47
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$41.00Price Target Upside3.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.53
Revenue Forecast (FY)$1.31B
Barrett Business Services Business Overview & Revenue Model
Company Description
Barrett Business Services, Inc. (BBSI) delivers a range of business management solutions specifically designed for small and mid-sized enterprises across the United States. The company has developed a proprietary management platform that seamlessl...
How the Company Makes Money
BBSI makes money primarily by providing PEO services in which it becomes a co-employer with its client and delivers a bundled set of employment-related services. The core revenue stream is PEO service revenue, which is typically tied to the client...
Barrett Business Services Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: clear commercial momentum (new client growth, product rollout, regional wins, benefits traction and disciplined expenses) offset by margin headwinds driven primarily by rising workers' compensation claim costs and the timing lag for pricing to take effect, an 18% decline in staffing revenue, and a meaningful drop in EPS. Management expects 2026 to be a transition year with margins improving in 2027 as pricing actions fully roll through, while maintaining a conservative near-term outlook and continued investment in products and go-to-market capabilities.Positive Updates
Top-line growth and gross billings
Gross billings increased 2.6% year-over-year to $2.29 billion in Q2 2026 (PEO gross billings +2.8% to $2.28 billion), reflecting continued revenue expansion despite headwinds.
Negative Updates
Staffing revenue decline
Staffing revenues declined 18% year-over-year to $14 million, driven by reduced order activity from existing staffing clients despite new-business wins outpacing runoff.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-line growth and gross billings
Gross billings increased 2.6% year-over-year to $2.29 billion in Q2 2026 (PEO gross billings +2.8% to $2.28 billion), reflecting continued revenue expansion despite headwinds.
Read all positive updates
Company Guidance
BBSI narrowed full‑year guidance, now expecting gross billings growth of 3–4% (vs. prior 3–5%), average WSE growth of 2–3% (vs. prior 2–4%), gross margin of 2.70%–2.75% of gross billings (vs. prior 2.70%–2.85%), and a normalized effective tax rate of 26%–27%; management called 2026 a transition/“low‑watermark” year for margins with improvement expected in 2027 as monthly workers’‑comp pricing rolls through. For context and drivers cited on the call: Q2 gross billings were $2.29B (+2.6% YoY), PEO gross billings +2.8%, staffing revenues down 18% to $14M, PEO WSEs +1%, average billing per WSE/day +2.2%, new client acquisitions +17% YoY, ~4,500 WSEs added from net new clients Y/Y, asset‑light markets +73% (added ~400 WSEs in Q2), East Coast +16%, Mountain +2%, PNW +3%, benefits added ~70 clients and >2,000 participants in Q2, Q2 net income per diluted share $0.52 (vs. $0.70 prior), investment income $1.9M, SG&A down ~2% in Q2 (full‑year SG&A growth expected below gross billings growth), $68M unrestricted cash and investments, no debt, $15M repurchased in Q2 under a $100M program ($40M remaining) and $1.9M paid in dividends this quarter.Barrett Business Services Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
84
Very Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.27B | 1.24B | 1.14B | 1.07B | 1.05B | 955.17M |
| Gross Profit | 250.90M | 260.91M | 253.25M | 242.53M | 234.84M | 204.51M |
| EBITDA | 69.27M | 80.09M | 78.25M | 76.26M | 71.67M | 56.36M |
| Net Income | 35.08M | 54.45M | 52.99M | 50.61M | 47.27M | 38.08M |
Balance Sheet | ||||||
| Total Assets | 711.28M | 779.07M | 745.51M | 721.54M | 686.94M | 746.95M |
| Cash, Cash Equivalents and Short-Term Investments | 67.89M | 157.19M | 121.86M | 152.19M | 159.75M | 166.17M |
| Total Debt | 24.50M | 24.45M | 21.45M | 21.21M | 21.18M | 25.30M |
| Total Liabilities | 507.50M | 538.07M | 524.10M | 522.40M | 509.10M | 538.42M |
| Stockholders Equity | 203.78M | 241.00M | 221.40M | 199.14M | 177.84M | 208.53M |
Cash Flow | ||||||
| Free Cash Flow | -12.28M | 47.18M | -4.07M | 55.40M | 11.80M | -22.26M |
| Operating Cash Flow | 14.53M | 65.95M | 10.09M | 67.22M | 27.78M | -15.46M |
| Investing Cash Flow | 30.58M | 30.76M | 38.78M | -55.19M | 61.15M | -112.86M |
| Financing Cash Flow | -93.21M | -52.97M | -41.13M | -44.57M | -60.18M | -26.89M |
Barrett Business Services Technical Analysis
Negative
39.74
Price Trends
36.40
Negative
33.03
Positive
34.17
Negative
Market Momentum
0.46
Positive
29.49
Positive
35.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBSI, the sentiment is Negative. The current price of 39.74 is above the 20-day moving average (MA) of 39.40, above the 50-day MA of 36.40, and above the 200-day MA of 34.17, indicating a bearish trend. The MACD of 0.46 indicates Positive momentum. The RSI at 29.49 is Positive, neither overbought nor oversold. The STOCH value of 35.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BBSI.
Barrett Business Services Risk Analysis
Barrett Business Services disclosed 42 risk factors in its most recent earnings report. Barrett Business Services reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Barrett Business Services Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.02B | 26.78 | 29.32% | 2.87% | -1.26% | -11.37% | |
70 Outperform | $958.81M | 24.71 | 17.82% | 0.81% | 7.12% | -21.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $1.93B | -120.50 | -24.52% | 4.96% | 2.64% | -140.86% | |
55 Neutral | $2.44B | 23.40 | 5.06% | 2.81% | 6.72% | ― | |
54 Neutral | $538.35M | -1.96 | -24.58% | 1.98% | -7.30% | -1239.34% |
* Industrials Sector Average
BBSI
Barrett Business Services
33.09
-13.33
-28.72%
NSP
Insperity
51.26
2.74
5.64%
KELYA
Kelly Services
15.62
3.19
25.66%
KFRC
Kforce
58.54
28.33
93.80%
MAN
ManpowerGroup
55.34
17.77
47.31%
Barrett Business Services Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Barrett Business Services Posts Mixed Q2 2026 Results
Neutral
Aug 5, 2026
On August 5, 2026, Barrett Business Services reported second-quarter 2026 results showing modest top-line growth but weaker profitability, as revenues rose 4% to $319.3 million and gross billings increased 3% to $2.29 billion, while net income fel...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Barrett Business Services Shareholders Expand Stock Incentive Plan
Positive
Jun 3, 2026
At its June 1, 2026 annual meeting, Barrett Business Services, Inc. shareholders approved the Second Amended and Restated 2020 Stock Incentive Plan, raising the share pool for stock-based awards from 2,900,000 to 4,100,000, with no other substanti...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Barrett Business Services Posts Q1 Loss, Reaffirms 2026 Outlook
Negative
May 6, 2026
Barrett Business Services reported that first-quarter 2026 revenues rose 5% year over year to $307.0 million, with gross billings up 3% to $2.16 billion and average worksite employees increasing 1.9%. The company maintained workers’ compensa...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.