Company Overview - Barrett Business Services, Inc. (BBSI) is a leading provider of business management solutions and one of the largest professional employer organizations (PEO) in the U.S. [4] - BBSI combines human resource outsourcing and professional management consulting to create a unique operational platform [4] - The company is licensed to operate in all 50 states and works with more than 8,000 clients across various industries [4] Conference Participation - BBSI is confirmed to attend the 2024 Annual Gateway Conference on September 4th and 5th at the Four Seasons Hotel in San Francisco, CA [1] - Executives from BBSI will be available for one-on-one meetings throughout the conference [1] Gateway Conference Insights - The Gateway Conference celebrates 25 years of fostering impactful industry connections, connecting growth-stage companies with prospective investors, analysts, and partners [2] - The event will feature presentations and one-on-one meetings with senior executives from over 100 private and public companies across various sectors [2]

Investing in stocks, after analyzing the valuation metrics, is considered one of the best practices. The price-to-earnings ratio has always been the obvious choice when considering the valuation metrics. This is because calculations based on earnings are easy and come in handy. However, the price-to-sales ratio is convenient for determining the value of stocks incurring losses or in an early development cycle, generating meager or no profit.What’s the Price-to-Sales Ratio?While a loss-making company with a ...

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, utilizing fundamental analysis and traditional valuation metrics to identify undervalued stocks [1] Company Analysis - Barrett Business Services (BBSI) is currently rated with a Zacks Rank of 2 (Buy) and holds an A grade for Value, indicating strong potential for value investors [2] - BBSI has a Price-to-Book (P/B) ratio of 4.61, which is significantly lower than the industry average of 12.57, suggesting that the stock may be undervalued [2] - Over the past year, BBSI's P/B ratio has fluctuated between a high of 4.82 and a low of 3.20, with a median of 4.01, indicating relative stability in its valuation metrics [2] - The Price-to-Sales (P/S) ratio for BBSI is 0.83, which is also lower than the industry average of 0.9, further supporting the notion that BBSI is undervalued [2] - The combination of these metrics, along with a strong earnings outlook, positions BBSI as an attractive value stock at this time [3]

For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Barrett Business Services (BBSI) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.Barrett Business Services is a member of our Business Services group, which includes 316 different companies and currently sits at #6 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 indi ...

Core Viewpoint - Investors are seeking growth stocks that demonstrate above-average growth potential, with Barrett Business Services (BBSI) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [1][6]. Earnings Growth - Barrett's historical EPS growth rate is 4.8%, but projected EPS growth for this year is 7.7%, significantly outperforming the industry average of 2.4% [3]. Asset Utilization Ratio - Barrett has an asset utilization ratio (sales-to-total-assets) of 1.52, indicating that the company generates $1.52 in sales for every dollar in assets, compared to the industry average of 1.17. Additionally, Barrett's sales are expected to grow by 7.1% this year, while the industry average is only 2.9% [4]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Barrett, with the Zacks Consensus Estimate for the current year increasing by 0.1% over the past month, which is correlated with potential near-term stock price movements [5]. Overall Positioning - Barrett has achieved a Growth Score of B and holds a Zacks Rank of 2 (Buy), positioning the company well for potential outperformance in the growth stock category [6][7].

Have you been paying attention to shares of Barrett Business Services (BBSI) ? Shares have been on the move with the stock up 11.9% over the past month. The stock hit a new 52-week high of $37 in the previous session. Barrett Business Services has gained 26.6% since the start of the year compared to the 7.8% move for the Zacks Business Services sector and the 9.2% return for the Zacks Outsourcing industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it ha ...

For the quarter ended June 2024, Barrett Business Services (BBSI) reported revenue of $2.03 billion, up 6.2% over the same period last year. EPS came in at $0.62, compared to $0.62 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $2.02 billion, representing a surprise of +0.66%. The company delivered an EPS surprise of +6.90%, with the consensus EPS estimate being $0.58.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wa ...

Barrett Business Services (BBSI) came out with quarterly earnings of $0.62 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.62 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 6.90%. A quarter ago, it was expected that this human resources management company would post a loss of $0.08 per share when it actually produced a loss of $0.01, delivering a surprise of 87.50%.Over the ...

Financial Data and Key Metrics Changes - Gross billings increased by 6% year-over-year to $2 billion in Q2 2024, compared to $1.9 billion in the prior year quarter [12] - PEO gross billings also rose by 6% to $2.01 billion, while staffing revenues declined by 3% to $20 million [12] - Net income per diluted share remained stable at $0.62, consistent with the year-ago quarter [16] Business Line Data and Key Metrics Changes - The number of worksite employees (WSEs) grew by 4% year-over-year, attributed to strong growth from net new PEO clients and hiring within the customer base [12][18] - Staffing operations experienced a decline of 3% year-over-year, impacted by macroeconomic headwinds, but are expected to grow sequentially in Q3 and Q4 [7][18] Market Data and Key Metrics Changes - PEO gross billings growth varied by region: East Coast grew by 19%, Mountain States by 7%, Southern California by 6%, Northern California by 4%, while the Pacific Northwest declined by 3% [13] - The Pacific Northwest region faced challenges with slower client growth and negative hiring trends [13][39] Company Strategy and Development Direction - The company is focusing on expanding into new markets with an asset-light model and has hired 17 new market development managers [8] - A strategic partnership with Kaiser Permanente for health insurance offerings is expected to enhance revenue and client acquisition [9][10] - The company aims to leverage its new health insurance products to attract new clients and enhance its value proposition [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in worksite employees and client hiring rates, with expectations for gross billings to increase between 6% and 8% for the year [18] - The company anticipates stable wage rates and hours worked, with an increase in average billing per WSE by 3% [12][16] - Management noted that the workers' compensation program is performing well, benefiting from favorable claim trends and adjustments [14] Other Important Information - The company repurchased $7 million of shares in Q2 2024, with $45 million remaining under the repurchase program [17] - The quarterly dividend rate was increased by 7% to $0.08 per share, reflecting confidence in cash flows and growth plans [17] Q&A Session Summary Question: Insights on workers' compensation adjustments - Management highlighted a favorable adjustment of $8.9 million, emphasizing a conservative approach and strong focus on workers' compensation [19][20] Question: Revenue impact from the Kaiser relationship - Management indicated that while initial revenue contributions from Kaiser may not be significant, they expect meaningful contributions by 2025 [22][23] Question: Referral partner network improvements - Management reported growth in the referral partner network, with active partners at an all-time high, although traction with benefits brokers is still developing [25][27] Question: Client migration trends in California - Management noted no significant impact from client migration out of California, with Northern California showing strong recovery in client hiring [30][31] Question: Progress in adding larger clients - Management confirmed a focus on small businesses, with new clients primarily coming from PEO takeaways rather than larger clients [44][45]

Revenue Performance - For the three months ended June 30, 2024, total revenues were $279.6 million, a 7.1% increase from $264.6 million in the same period of 2023[74]. - Revenue for Q2 2024 reached $279.7 million, reflecting a 5.7% increase from $264.6 million in Q2 2023, driven by a $15.6 million increase in PEO services revenue[81]. - Revenue for the first six months of 2024 was $545.4 million, a 5.0% increase from $519.3 million in the first six months of 2023, with PEO services revenue up by $29.5 million[82]. Professional Employer Services - Professional employer services accounted for 92.9% of total revenues in Q2 2024, up from 92.3% in Q2 2023[74]. - Average worksite employees (WSEs) for the three months ended June 30, 2024, were 128,734, representing a year-over-year growth of 3.7%[79]. Gross Billings and Margins - Gross billings for the six months ended June 30, 2024, reached $3.94 billion, compared to $3.70 billion in the same period of 2023, indicating a growth of 6.5%[76]. - The gross margin for the three months ended June 30, 2024, was 3.3%, slightly down from 3.5% in the same period of 2023[78]. - Gross margin for Q2 2024 was $67.9 million, or 24.2% of revenue, down from $67.0 million, or 25.3% of revenue in Q2 2023[81]. Costs and Expenses - Total cost of revenues for the three months ended June 30, 2024, was $210.8 million, representing 75.8% of total revenues, compared to 74.7% in the same period of 2023[74]. - Payroll taxes and benefits for Q2 2024 totaled $148.8 million, or 53.2% of revenue, compared to $134.1 million, or 50.7% of revenue in Q2 2023, primarily due to higher average payroll tax rates[81]. - SG&A expenses for the first six months of 2024 were $88.0 million, or 16.1% of revenue, compared to $85.0 million, or 16.4% of revenue in the first six months of 2023[83]. Net Income and Cash Flow - Net income for the three months ended June 30, 2024, was $16.7 million, a decrease from $17.0 million in the same period of 2023[74]. - Net income for Q2 2024 was $16.7 million, a slight decrease from $17.0 million in Q2 2023, with diluted net income per share remaining stable at $0.62[81]. - Net cash used in operating activities for the first six months of 2024 was $42.4 million, compared to $23.2 million for the same period in 2023, largely due to increased trade accounts receivable[87]. - The company's cash balance decreased to $70.0 million as of June 30, 2024, down from a decrease of $52.8 million in the same period of 2023[85]. Tax and Future Outlook - The effective income tax rate for Q2 2024 was 28.8%, up from 28.1% in Q2 2023, influenced by state taxes and federal/state tax credits[81]. - The company anticipates continued fluctuations in quarterly operating results due to factors such as seasonality and competition[84]. Employee Benefits - The company began offering employee benefit programs in 2023, including medical, dental, and vision plans, aimed at providing strategic value to clients[73]. Market Presence - The company operates in 68 markets across the United States, supporting local business teams to enhance client relationships and operational efficiency[69].