Barrett Business Services (BBSI) AI Stock Analysis

• Market Cap: $702.66M
• Dividend Yield: 0.88%
• Average Volume (3M): 253.93K
• Price to Earnings (P/E): 13.3
• Beta (1Y): 0.87
• Revenue Growth: 9.64%
• EPS Growth: 9.93%
• Country: US
• Employees: 135,727
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 0.64
• Shares Outstanding: 25,203,090
• 10 Day Avg. Volume: 287,688
• 30 Day Avg. Volume: 253,932
• PEG Ratio: 3.42
• Price to Book (P/B): 2.58
• Price to Sales (P/S): 0.74
• P/FCF Ratio: 19.47
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 0.52
• Enterprise Value/Gross Profit: 2.48
• Enterprise Value/Ebitda: 8.11
• 1Y Price Target: $41.50
• Price Target Upside: 48.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.38
• Revenue Forecast (FY): $1.34B

• Rating: 71 Outperform
• Price Target: $31.00 ▲(11.19% Upside)
• Action: Upgraded Date: 03/04/26
• Date: Action: Upgraded 03/04/26

Overall score is driven by solid financial strength (growth, profitability, and a very conservative balance sheet) and a reasonable valuation, partially offset by weak technicals (price well below key moving averages with negative momentum) and some operational headwinds and margin pressure highlighted in the latest earnings call.

Positive Factors

Conservative balance sheet

Very low leverage and a growing equity base provide durable financial flexibility. This reduces default and refinancing risk, supports ongoing dividends and buybacks, and gives capacity to invest in technology or M&A without stressing cash flows during cyclical slowdowns.

Consistent revenue and billings growth

Sustained top-line expansion and re-accelerating gross billings reflect durable demand for PEO services and successful client acquisition. Consistent growth supports operating leverage, scale for service delivery, and long-term profitability potential across business cycles.

Product & tech expansion (HRIS)

Introducing an integrated HRIS module with an enterprise partner is a structural enhancement: it raises client stickiness, opens cross-sell paths, and modernizes the service platform—helpful for winning larger clients and improving long-term margin sustainability.

Negative Factors

Volatile cash generation

Irregular operating and free cash flow undermines predictability for capital returns and investment. Volatility in cash conversion increases refinancing and timing risk, complicating capital allocation decisions like buybacks, M&A or tech investments over the medium term.

Margin pressure from insurance & staffing mix

Compression in gross and operating margins due to workers' comp pricing and reduced staffing activity can erode ROE and free cash generation. If sustained, margin headwinds limit reinvestment, slow equity return normalization, and reduce resilience to cost inflation.

Segment and regional exposure

Material weakness in the staffing segment and localized slowdowns (e.g., noted California and Pacific Northwest softness) reveal concentration and exposure risks. Persistent regional or segment downturns could slow overall growth and pressure utilization of fixed service capacity.

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 PEO services, which involve co-employment agreements where BBSI assumes certain employer responsibilities for its clients. The company charges its clients a fee calculated as a percentage of payroll, which includes various HR services such as payroll processing, benefits administration, and risk management. Additionally, BBSI earns revenue from value-added services, including consulting and training programs designed to improve workforce management. Significant partnerships with insurance providers and benefits vendors also enhance its service offerings and contribute to its earnings by allowing BBSI to offer competitive rates and packages to its clients.

Barrett Business Services Financial Statement Overview

Summary

Strong overall fundamentals supported by steady revenue growth and solid profitability, plus a conservatively levered balance sheet. The main offset is uneven cash-flow conversion across years (including negative free cash flow in 2024), which reduces confidence in consistency despite the 2025 rebound.

Income Statement

Revenue has expanded steadily over the period (from $881M in 2020 to $1.24B in 2025), with growth re-accelerating in 2025. Profitability is solid and fairly consistent for the industry, with gross margin around ~21–23% and net margin around ~4–5%. The main weakness is modest margin compression in 2025 versus 2023–2024 (lower gross and operating margins), suggesting either pricing pressure or higher costs.

Balance Sheet

The balance sheet is conservatively levered, with very low debt relative to equity (debt-to-equity ~0.07 in 2025 and consistently low across the period). Equity has grown meaningfully by 2025, supporting a stronger capital base. A watch item is that returns on equity have come down from the very high 2022–2024 levels, indicating profitability has not kept pace with the larger equity base.

Cash Flow

Cash generation is mixed. 2025 shows a strong rebound with operating cash flow of ~$66M and free cash flow of ~$47M, and free cash flow running at roughly 72% of net income. However, cash flow has been volatile: 2024 produced negative free cash flow and very low operating cash flow despite solid earnings, and 2020–2021 showed negative operating cash flow and negative free cash flow. This variability reduces confidence in the consistency of cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.24B	1.14B	1.07B	1.05B	955.17M
Gross Profit	260.91M	253.25M	242.53M	234.84M	204.51M
EBITDA	80.09M	78.25M	76.26M	71.67M	56.36M
Net Income	54.45M	52.99M	50.61M	47.27M	38.08M
Balance Sheet
Total Assets	779.07M	745.51M	721.54M	686.94M	746.95M
Cash, Cash Equivalents and Short-Term Investments	192.24M	121.86M	152.19M	159.75M	166.17M
Total Debt	24.45M	21.45M	21.21M	21.18M	25.30M
Total Liabilities	423.36M	524.10M	522.40M	509.10M	538.42M
Stockholders Equity	355.71M	221.40M	199.14M	177.84M	208.53M
Cash Flow
Free Cash Flow	47.18M	-4.07M	55.40M	11.80M	-22.26M
Operating Cash Flow	65.95M	10.09M	67.22M	27.78M	-15.46M
Investing Cash Flow	30.76M	38.78M	-55.19M	61.15M	-112.86M
Financing Cash Flow	-52.97M	-41.13M	-44.57M	-60.18M	-26.89M

Barrett Business Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 27.88 is below the 20-day moving average (MA) of 33.04, below the 50-day MA of 35.66, and below the 200-day MA of 40.57, indicating a bearish trend. The MACD of -2.25 indicates Positive momentum. The RSI at 26.77 is Positive, neither overbought nor oversold. The STOCH value of 28.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BBSI.

Barrett Business Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BBSI	71 Outperform	$702.66M	13.33	24.08%	0.88%	9.64%	9.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KELYA	56 Neutral	$339.12M	-1.29	-23.06%	3.53%	0.46%	-477.90%
KFRC	54 Neutral	$483.27M	13.79	27.19%	5.12%	-5.91%	-23.01%
MAN	51 Neutral	$1.25B	―	-0.64%	4.96%	-2.44%	-156.01%
NSP	43 Neutral	$797.20M	-110.57	-9.79%	6.37%	3.19%	-86.21%

Barrett Business Services Corporate Events

Barrett Business Services Reports Strong 2025 Results, Dividend

Barrett Business Services, Inc. reported that fourth-quarter 2025 revenues rose 5% to $321.1 million and gross billings increased 6% to $2.40 billion, driven by growth in PEO services and a 5% increase in average worksite employees, while net income edged down to $16.4 million but diluted EPS ticked up to $0.64. For full-year 2025, reported on February 25, 2026, revenues grew 8% to $1.24 billion, gross billings climbed 9% to $9.04 billion, and net income rose 3% to $54.4 million with EPS of $2.08, supported by lower workers’ compensation costs, a stronger cash position of $157.2 million with no debt, and more than $50 million returned to shareholders via buybacks and dividends, as the board also declared a regular quarterly dividend of $0.08 per share payable March 27, 2026.

The most recent analyst rating on (BBSI) stock is a Buy with a $43.00 price target. To see the full list of analyst forecasts on Barrett Business Services stock, see the BBSI Stock Forecast page.