Analysts Have Made A Financial Statement On Barrett Business Services, Inc.’s (NASDAQ:BBSI) First-Quarter Report

Analysts Have Made A Financial Statement On Barrett Business Services, Inc.’s (NASDAQ:BBSI) First-Quarter Report

As you might know, Barrett Business Services, Inc. (NASDAQ:BBSI) recently reported its first-quarter numbers. Revenues of US$266m arrived in line with expectations, although statutory losses per share were US$0.02, just a small fraction of what broker models predicted. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Barrett Business Services

Analysts Have Made A Financial Statement On Barrett Business Services, Inc.’s (NASDAQ:BBSI) First-Quarter Report
NasdaqGS:BBSI Earnings and Revenue Growth May 4th 2024

Taking into account the latest results, the current consensus from Barrett Business Services’ four analysts is for revenues of US$1.13b in 2024. This would reflect an okay 4.6% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 3.3% to US$7.85. Before this earnings report, the analysts had been forecasting revenues of US$1.16b and earnings per share (EPS) of US$7.66 in 2024. So it’s pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company’s earnings power.

There’s been no real change to the average price target of US$145, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company’s valuation over a longer timeframe. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Barrett Business Services at US$160 per share, while the most bearish prices it at US$140. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It’s clear from the latest estimates that Barrett Business Services’ rate of growth is expected to accelerate meaningfully, with the forecast 6.1% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. Barrett Business Services is expected to grow at about the same rate as its industry, so it’s not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Barrett Business Services following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$145, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Barrett Business Services analysts – going out to 2025, and you can see them free on our platform here.

We also provide an overview of the Barrett Business Services Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Valuation is complex, but we’re helping make it simple.

Find out whether Barrett Business Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.