Barrett Business Services (BBSI)
NASDAQ:BBSI
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Barrett Business Services
(NASDAQ:BBSI)
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Rating:65Neutral
Price Target:
$32.00
â–²(7.17% Upside)
Action:ReiteratedDate:05/09/26
The score is driven primarily by solid underlying fundamentals and a very strong, low-leverage balance sheet, partially offset by weak recent cash conversion and softer TTM earnings. Technicals are neutral-to-weak due to the longer-term downtrend (below the 100/200DMAs), while valuation is constrained by the negative P/E despite a modest dividend. The earnings call was moderately supportive on reiterated guidance and capital return, but tempered by staffing revenue weakness and tax-related noise.
Positive Factors
Conservative Balance Sheet
A very low leverage profile and sizable equity provide durable financial flexibility. This supports continued capital returns, investment in tech and product rollouts, and resilience to underwriting or cyclical pressures in staffing and workers’ comp over the next several months.
Negative Factors
Weak Cash Conversion / FCF Volatility
Material volatility in free cash flow and only ~half of net income converting to FCF in the trailing twelve months reduces internal funding reliability. That constrains consistent buybacks, investing, or dividend increases and raises sensitivity to working capital or claims volatility over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
A very low leverage profile and sizable equity provide durable financial flexibility. This supports continued capital returns, investment in tech and product rollouts, and resilience to underwriting or cyclical pressures in staffing and workers’ comp over the next several months.
Read all positive factors
Barrett Business Services (BBSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$733.60M
Dividend Yield0.88%
Average Volume (3M)253.93K
Price to Earnings (P/E)―
Beta (1Y)0.75
Revenue Growth7.12%
EPS Growth-21.18%
CountryUS
Employees135,727
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)1.58
Shares Outstanding24,559,649
10 Day Avg. Volume287,688
30 Day Avg. Volume253,932
Financial Highlights & Ratios
PEG Ratio3.42
Price to Book (P/B)3.81
Price to Sales (P/S)0.74
P/FCF Ratio19.47
Enterprise Value/Market Cap0.82
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit2.31
Enterprise Value/Ebitda7.99
Forecast
1Y Price Target
$41.50Price Target Upside38.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.65
Revenue Forecast (FY)$1.31B
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 ind...
How the Company Makes Money
BBSI primarily makes money through its PEO model by charging client companies for a packaged set of employer-related services. A major revenue stream is fees associated with payroll and HR administration, generally tied to client payroll levels an...
Barrett Business Services Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational story: steady top-line and PEO growth, meaningful benefits momentum, strong East Coast and asset-light market expansion, product/tech investments, and a robust balance sheet with active capital return. Offsetting items included a pronounced 21% decline in staffing revenue, regional softness in California, a material one-time $11.6M tax charge that produced a GAAP loss, and near-term margin and SG&A pressures. Management reiterated full-year guidance and highlighted improving workers' compensation pricing, suggesting stabilization and potential margin recovery over time.Positive Updates
Solid Top-Line Growth
Gross billings increased 3.5% year-over-year to $2.16 billion in Q1 2026 (PEO gross billings +3.7% to $2.15 billion), in line with company expectations.
Negative Updates
Significant Staffing Revenue Decline
Staffing revenues declined 21% year-over-year to $14 million in Q1 2026, reflecting client reluctance to place staffing orders amid macroeconomic uncertainty.
Read all updates
Q1-2026 Updates
Positive
Negative
Solid Top-Line Growth
Gross billings increased 3.5% year-over-year to $2.16 billion in Q1 2026 (PEO gross billings +3.7% to $2.15 billion), in line with company expectations.
Read all positive updates
Company Guidance
BBSI reiterated its 2026 guidance, calling for gross billings growth of 3–5%, WSE (PEO worksite employee) growth of 2–4%, gross margin as a percentage of gross billings of 2.7–2.85%, and a normalized effective tax rate of 26–27%. Management said Q1 was in line with the plan (Q1 gross billings +3.5% to $2.16B; PEO gross billings +3.7% to $2.15B; staffing revenues -21% to $14M), with PEO WSEs +2% (≈+5,300 WSEs from net new clients; asset‑light +≈550 WSEs), average billing per WSE/day +1.7%, benefits costs +56% YoY (≈+140 benefits clients and ≈+3,500 participants), favorable prior‑year workers’ comp adjustments of $1.1M, SG&A +≈6%, investment income $2M, $92M of unrestricted cash and investments and no debt, $20M of buybacks in Q1 at an average $28.68/share with $55M remaining, and a one‑time $11.6M tax charge ($0.46/sh) that produced GAAP EPS loss $0.59 (adjusted loss $0.13); they expect hiring headwinds to moderate in H2 and improving workers’ comp pricing (five consecutive months of increases; WCIRB recommended +10% CA advisory rates) to help stabilize and expand margins over time.Barrett Business Services Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
85
Very Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.25B | 1.24B | 1.14B | 1.07B | 1.05B | 955.17M |
| Gross Profit | 259.30M | 260.91M | 253.25M | 242.53M | 234.84M | 204.51M |
| EBITDA | 75.07M | 80.09M | 78.25M | 76.26M | 71.67M | 56.36M |
| Net Income | 40.67M | 54.45M | 52.99M | 50.61M | 47.27M | 38.08M |
Balance Sheet | ||||||
| Total Assets | 783.22M | 779.07M | 745.51M | 721.54M | 686.94M | 746.95M |
| Cash, Cash Equivalents and Short-Term Investments | 214.99M | 157.19M | 121.86M | 152.19M | 159.75M | 166.17M |
| Total Debt | 25.58M | 24.45M | 21.45M | 21.21M | 21.18M | 25.30M |
| Total Liabilities | 577.56M | 538.07M | 524.10M | 522.40M | 509.10M | 538.42M |
| Stockholders Equity | 205.67M | 241.00M | 221.40M | 199.14M | 177.84M | 208.53M |
Cash Flow | ||||||
| Free Cash Flow | 18.68M | 47.18M | -4.07M | 55.40M | 11.80M | -22.26M |
| Operating Cash Flow | 38.67M | 65.95M | 10.09M | 67.22M | 27.78M | -15.46M |
| Investing Cash Flow | 66.02M | 30.76M | 38.78M | -55.19M | 61.15M | -112.86M |
| Financing Cash Flow | -63.15M | -52.97M | -41.13M | -44.57M | -60.18M | -26.89M |
Barrett Business Services Technical Analysis
Neutral
29.86
Price Trends
29.88
Negative
33.24
Negative
38.34
Negative
Market Momentum
-0.09
Negative
54.63
Neutral
82.18
Negative
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 29.86 is above the 20-day moving average (MA) of 29.16, below the 50-day MA of 29.88, and below the 200-day MA of 38.34, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 54.63 is Neutral, neither overbought nor oversold. The STOCH value of 82.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $774.98M | 15.89 | 27.22% | 5.12% | -3.91% | -22.90% | |
65 Neutral | $733.60M | -12.34 | 16.15% | 0.88% | 7.12% | -21.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $357.54M | -13.06 | -22.10% | 3.53% | -7.30% | -1239.34% | |
50 Neutral | $1.24B | 7.72 | -32.05% | 6.37% | 3.04% | -140.22% | |
49 Neutral | $1.39B | 137.58 | -0.81% | 4.96% | 4.77% | -115.03% |
* Industrials Sector Average
BBSI
Barrett Business Services
29.87
-11.21
-27.29%
NSP
Insperity
32.59
-32.05
-49.58%
KELYA
Kelly Services
9.87
-2.14
-17.79%
KFRC
Kforce
43.46
3.84
9.69%
MAN
ManpowerGroup
29.84
-12.49
-29.51%
Barrett Business Services Corporate Events
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...
Financial DisclosuresLegal Proceedings
Barrett Business Faces Adverse Tax Court Ruling, Added Expenses
Negative
Mar 31, 2026
On March 30, 2026, the U.S. Tax Court granted the IRS’s motion for partial summary judgment and denied Barrett Business Services, Inc.’s competing motion in a dispute over wage-based tax credits, including the Work Opportunity Tax Cred...
Stock BuybackDividendsFinancial Disclosures
Barrett Business Services Reports Strong 2025 Results, Dividend
Positive
Feb 25, 2026
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 inco...
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.