BBSI Stock Overview
Barrett Business Services, Inc. provides business management solutions for small and mid-sized companies in the United States.
Barrett Business Services Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$85.55|
|52 Week High||US$86.82|
|52 Week Low||US$57.76|
|1 Month Change||11.47%|
|3 Month Change||20.37%|
|1 Year Change||14.77%|
|3 Year Change||-2.53%|
|5 Year Change||75.24%|
|Change since IPO||3,058.77%|
Recent News & Updates
Barrett Business Services: A Stock Repurchase Program That Makes Sense
With a management platform bringing knowledge from the management consulting industry and the human resource outsourcing industry, Barrett Business Services has been successful since 1965. Let’s point out that the company counts with a network of insurance brokers, financial advisors, attorneys, and CPA’s that introduce the software to clients. I also believe that in the near future, economies of scale and leverage will help enhance the free cash flow margins. The company recently reported a new stock repurchase program, which will likely enhance value generation for shareholders in the coming months. Barrett Business Services (BBSI) counts with expertise accumulated since 1965 and an extensive network of referrals, which will likely help enhance sales growth. Under the most optimistic case scenario that includes M&A operations and geographic expansion, my DCF model resulted in a valuation of $155 per share. In my view, even considering risks from geographic concentration of revenue in California and failure of partner agreements, the current stock price appears too low. Barrett Business Services: Better Guidance And A Stock Repurchase Program Barrett Business Services, Inc., offers business management solutions. With a management platform bringing knowledge from the management consulting industry and the human resource outsourcing industry, the company has been successful since 1965. Investor Presentation Let us go straight to the point. In my view, there are two main reasons to have a look at Barrett Business now. First, management recently increased its guidance. Second, gross billings are now expected to grow at close to 13% y/y. In my view, as soon as traders have a look at the new guidance, the stock price will most likely trend north: In light of the strong performance in the second quarter, BBSI is increasing its outlook for 2022 and now expects the following: Gross billings growth of 11% to 13%, increased from 10% to 12% in the prior outlook. Source: BBSI Reports Strong Second Quarter 2022 Financial Results Besides, the company recently reported a new stock repurchase program, which will likely enhance value generation for shareholders in the coming months. We are talking about the acquisition of $75 million of stock over the next two years: On February 28, 2022, BBSI’s board of directors approved a new stock repurchase program authorizing the Company to purchase up to $75 million of its stock over a two-year period. Source: BBSI Reports Strong Second Quarter 2022 Financial Results Great Expectations From Other Financial Analysts Analysts out there are quite optimistic about Barrett Business Services. They believe that net sales growth could stand at 10% in 2022 and 7.39% in 2023. In 2022 and 2023, the EBITDA margin is expected to reach 5% to 6%, and the net income would grow to $49 million in 2023. These numbers made me interested in the company, and I decided to form my own opinion. Other Investment Analysts Let’s finally note that the average target price by the analysts stands at $107 with a high price target of $117 and a low-price target of $101. I obtained much more optimistic results. Other Investment Analysts Balance Sheet As of June 30, 2022, Barrett Business Services reports $34 million in cash, $756 million in total assets, and an asset/liability ratio of 1x-2x. The company’s financial situation appears solid. Quarterly Report Management does not report debt, which most financial advisors would appreciate. With that, long-term operation lease liabilities stand at $13 million, and accrued payroll, payroll taxes, and related benefits stand at $282 million. Long-term workers compensation claims liabilities are equal to $172 million. Let’s tell it this way, employees and workers seem to be financing part of the company’s operations. Quarterly Report The Most Likely Scenario Includes 7.5% Sales Growth And A Fair Price Close To $125 Under normal conditions, I believe that organic growth will continue to play a major role. The company knows well how to add new clients as well as design new products. Keep in mind that management counts with know-how accumulated since 1965. I also believe that in the near future, economies of scale and leverage will help enhance the free cash flow margins. These business catalysts were depicted in a recent presentation to investors. Investor Presentation In my opinion, if the management successfully hires new business teams in existing branches, client referrals will most likely help generate revenue growth. More revenue growth will likely help push the company’s valuation up: We believe our clients are one of our best advocates and powerful drivers of referral-based growth. In each market, operations teams provide expertise, consultation and support to our clients, driving growth and supporting retention. We anticipate that by adding business teams to existing branches, we can achieve incremental growth in those markets, driven by our reputation and by client referrals. In most markets business development efforts are led by area managers and are further supported by business development managers. Source: 10-k I also believe that the role of partners will likely help Barrett Business find new clients. Let’s point out that the company counts with a network of insurance brokers, financial advisors, attorneys, and CPAs that introduce the software to clients. Under this case scenario, I assumed that the network built for many years will continue to enhance business: Our business growth has three primary sources: referrals from existing clients, direct business-to-business sales efforts by our area managers and business development managers, and an extensive referral network. Partners in our referral network include insurance brokers, financial advisors, attorneys, CPAs, and other business professionals who can facilitate an introduction to prospective clients. Source: 10-k Considering previous sales growth, I believe that sales growth at around 7.5% y/y is likely. It means that the company would deliver close to $2.17 billion in sales in 2032. If we also assume an EBITDA margin around 5.5% and D&A/Sales close to 0.65%, non-operating profit after tax would stand at almost $80 million by 2032. I believe that my numbers are conservative. Author's Work If we add D&A between $5 million and $15 million, and subtract capex around $7.5 million and $15 million, the free cash flow would stay between $30 million and $120 million. With a discount of 11.855%, the net present value of future free cash flow would stand at almost $450 million. Author's Work Peers trade at an average of close to 7x EBITDA. However, I believe that Barrett Business could trade at 10x EBITDA considering sales growth close to 7.5% and the previous EBITDA margin assumption. SA With the previous figures, I obtained an implied enterprise value of $800 million and an equity close to $892.1 million. The fair price would stand at $125 per share, and the IRR could be close to 5%.
Barrett Business Services' (NASDAQ:BBSI) Dividend Will Be $0.30
Barrett Business Services, Inc. ( NASDAQ:BBSI ) has announced that it will pay a dividend of $0.30 per share on the 2nd...
|BBSI||US Professional Services||US Market|
Return vs Industry: BBSI exceeded the US Professional Services industry which returned -9.6% over the past year.
Return vs Market: BBSI exceeded the US Market which returned -9% over the past year.
|BBSI Average Weekly Movement||3.9%|
|Professional Services Industry Average Movement||6.5%|
|Market Average Movement||7.6%|
|10% most volatile stocks in US Market||17.1%|
|10% least volatile stocks in US Market||3.1%|
Stable Share Price: BBSI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: BBSI's weekly volatility (4%) has been stable over the past year.
About the Company
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.
Barrett Business Services Fundamentals Summary
|BBSI fundamental statistics|
Is BBSI overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|BBSI income statement (TTM)|
|Cost of Revenue||US$788.66m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||6.19|
|Net Profit Margin||4.33%|
How did BBSI perform over the long term?See historical performance and comparison
1.4%Current Dividend Yield
Does BBSI pay a reliable dividends?See BBSI dividend history and benchmarks
|Barrett Business Services dividend dates|
|Ex Dividend Date||Aug 18 2022|
|Dividend Pay Date||Sep 02 2022|
|Days until Ex dividend||2 days|
|Days until Dividend pay date||13 days|
Does BBSI pay a reliable dividends?See BBSI dividend history and benchmarks
Is BBSI undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for BBSI?
Other financial metrics that can be useful for relative valuation.
|What is BBSI's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does BBSI's PE Ratio compare to its peers?
|BBSI PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
KELY.A Kelly Services
HSII Heidrick & Struggles International
BBSI Barrett Business Services
Price-To-Earnings vs Peers: BBSI is expensive based on its Price-To-Earnings Ratio (13.8x) compared to the peer average (10.7x).
Price to Earnings Ratio vs Industry
How does BBSI's PE Ratio compare vs other companies in the US Professional Services Industry?
Price-To-Earnings vs Industry: BBSI is good value based on its Price-To-Earnings Ratio (13.8x) compared to the US Professional Services industry average (19.1x)
Price to Earnings Ratio vs Fair Ratio
What is BBSI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||13.8x|
|Fair PE Ratio||15.6x|
Price-To-Earnings vs Fair Ratio: BBSI is good value based on its Price-To-Earnings Ratio (13.8x) compared to the estimated Fair Price-To-Earnings Ratio (15.6x).
Share Price vs Fair Value
What is the Fair Price of BBSI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: BBSI ($85.55) is trading below our estimate of fair value ($128.03)
Significantly Below Fair Value: BBSI is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Barrett Business Services forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: BBSI's forecast earnings growth (7.6% per year) is above the savings rate (1.9%).
Earnings vs Market: BBSI's earnings (7.6% per year) are forecast to grow slower than the US market (14.4% per year).
High Growth Earnings: BBSI's earnings are forecast to grow, but not significantly.
Revenue vs Market: BBSI's revenue (7.5% per year) is forecast to grow slower than the US market (7.8% per year).
High Growth Revenue: BBSI's revenue (7.5% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if BBSI's Return on Equity is forecast to be high in 3 years time
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How has Barrett Business Services performed over the past 5 years?
Past Performance Score4/6
Past Performance Score 4/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: BBSI has a high level of non-cash earnings.
Growing Profit Margin: BBSI's current net profit margins (4.3%) are higher than last year (4.2%).
Past Earnings Growth Analysis
Earnings Trend: BBSI's earnings have grown by 8.6% per year over the past 5 years.
Accelerating Growth: BBSI's earnings growth over the past year (14.8%) exceeds its 5-year average (8.6% per year).
Earnings vs Industry: BBSI earnings growth over the past year (14.8%) underperformed the Professional Services industry 23.3%.
Return on Equity
High ROE: BBSI's Return on Equity (25.1%) is considered high.
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How is Barrett Business Services's financial position?
Financial Health Score6/6
Financial Health Score 6/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: BBSI's short term assets ($510.5M) exceed its short term liabilities ($389.8M).
Long Term Liabilities: BBSI's short term assets ($510.5M) exceed its long term liabilities ($192.0M).
Debt to Equity History and Analysis
Debt Level: BBSI is debt free.
Reducing Debt: BBSI has no debt compared to 5 years ago when its debt to equity ratio was 6.6%.
Debt Coverage: BBSI has no debt, therefore it does not need to be covered by operating cash flow.
Interest Coverage: BBSI has no debt, therefore coverage of interest payments is not a concern.
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What is Barrett Business Services's current dividend yield, its reliability and sustainability?
Dividend Score 3/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: BBSI's dividend (1.4%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.48%).
High Dividend: BBSI's dividend (1.4%) is low compared to the top 25% of dividend payers in the US market (3.99%).
Stability and Growth of Payments
Stable Dividend: BBSI's dividends per share have been stable in the past 10 years.
Growing Dividend: BBSI's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its low payout ratio (20.3%), BBSI's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: BBSI is paying a dividend but the company has no free cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Gary Kramer (42 yo)
Mr. Gary Edward Kramer serves as Chief Executive Officer and President at Barrett Business Services, Inc. since March 5, 2020 and its Director since May 27, 2020. Mr. Kramer served as Chief Financial and A...
CEO Compensation Analysis
Compensation vs Market: Gary's total compensation ($USD3.01M) is about average for companies of similar size in the US market ($USD3.83M).
Compensation vs Earnings: Gary's compensation has increased by more than 20% in the past year.
Experienced Management: BBSI's management team is considered experienced (2.2 years average tenure).
Experienced Board: BBSI's board of directors are considered experienced (5.7 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: BBSI insiders have sold more shares than they have bought in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Barrett Business Services, Inc.'s employee growth, exchange listings and data sources
- Name: Barrett Business Services, Inc.
- Ticker: BBSI
- Exchange: NasdaqGS
- Founded: 1965
- Industry: Human Resource and Employment Services
- Sector: Commercial Services
- Implied Market Cap: US$606.437m
- Shares outstanding: 7.09m
- Website: https://www.bbsi.com
Number of Employees
- Barrett Business Services, Inc.
- 8100 NE Parkway Drive
- Suite 200
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/08/18 00:00|
|End of Day Share Price||2022/08/18 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.