One-glance verdict
Undervalued
$67.20 our estimate vs market $32.44
Wall Street consensus: $40.75 (-39.4% lower than our fair-value estimate)
52% below our estimate, below the bear case
Fundamentals snapshot
Barrett Business Services, Inc.
BBSI · NMS · Industrials · Staffing & Employment Services
Current price
$32.44
52-week range
$25.33 - $42.25
Market cap
$786.19M
Balance sheet
Healthy
363.53x Strong cushion
Net cash $43.39M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 1.5% last year.
- Reward Returns 16.3% on equity, ahead of 16% of its peers.
- Risk Stock trades 39.8% above its 5-year average P/E.
- Risk Insider ownership is only 5.2% (peer median: 6.2%).
What this company does
Barrett Business Services, Inc.
Barrett Business Services (BBSI) helps small and medium-sized businesses in the US by handling things like payroll, workers' compensation insurance, and finding employees. Their main income comes from these services, which are like a steady stream of money (called recurring revenue) because businesses need them all the time. This matters because it means BBSI has a reliable business model that doesn't fluctuate too wildly.
How the company got here
Barrett Business Services, Inc. (BBSI) traces its origins back to 1951, initially focusing on providing temporary help to businesses. Over the decades, it evolved, with a significant merger in 1971 that laid the groundwork for its current structure. The company officially incorporated in 1965 and later went public, listing on the Nasdaq stock exchange. This transition allowed BBSI to access capital for expansion and increase its visibility in the market. A key turning point was the strategic shift to offer Professional Employer Organization (PEO) services alongside its traditional staffing business, creating a more integrated solution for its clients. The company has also focused on rebuilding internal controls and reserve discipline, particularly after accounting and workers' compensation reserve issues in 2014.
What it actually does
BBSI acts as a comprehensive business management solutions provider, primarily for small and mid-sized companies. It offers a platform that combines expertise from management consulting with tools from human resource outsourcing. Essentially, BBSI helps businesses manage various administrative and HR functions, allowing owners to concentrate on growing their core operations. This includes handling payroll, employee benefits, workers' compensation, risk management, and workplace safety programs.
Professional Employer Services (PEO)
This is BBSI's largest business line, accounting for the majority of its revenue. Through PEO services, BBSI enters into a 'co-employment' relationship with its clients. This means BBSI shares certain employer responsibilities, such as processing payroll, managing payroll taxes, and handling workers' compensation claims for the client's existing employees. Clients pay BBSI a percentage of their total payroll, which effectively turns a fixed administrative cost into a variable one tied to wages. This segment provides a recurring revenue stream for BBSI.
Staffing & Recruiting Services
This segment of BBSI focuses on providing temporary and permanent staffing solutions. This includes offering on-demand or short-term staffing assignments, contract staffing, and direct placement services for clients needing to fill specific roles. While a smaller part of BBSI's overall business compared to PEO services, staffing and recruiting serves as a complementary offering and a way to build new client relationships.
What management is betting on now
BBSI's current strategy centers on being a high-trust operating partner for business owners, helping them reduce administrative burdens and employment risks. Management is focused on profitable growth by expanding its client base and worksite employees, emphasizing client retention to build long-term value. The company leverages a local-service approach, with market-based teams building client relationships, while centralized systems handle the back-office functions. This dual approach aims to differentiate BBSI from pure software providers and staffing-only firms.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-4.23M
FY2024 Q4
$50.22M
FY2025 Q1
$697.00K
FY2025 Q2
$-58.23M
FY2025 Q3
$34.07M
FY2025 Q4
$70.64M
FY2026 Q1
$-27.81M
FY2026 Q2
$-61.38M
Revenue
—
Net income
$12.87M
Diluted EPS
0.52
Operating cash flow
$-55.88M
Free cash flow
$-61.38M
Fetching…
Sources
Revenue
—
Net income
$-14.80M
Diluted EPS
-0.59
Operating cash flow
$-22.08M
Free cash flow
$-27.81M
Fetching…
Sources
Revenue
—
Net income
$16.40M
Diluted EPS
0.63
Operating cash flow
$76.13M
Free cash flow
$70.64M
Fetching…
Sources
Revenue
—
Net income
$20.62M
Diluted EPS
0.79
Operating cash flow
$38.43M
Free cash flow
$34.07M
Fetching…
Sources
Revenue
—
Net income
$18.45M
Diluted EPS
0.70
Operating cash flow
$-53.82M
Free cash flow
$-58.23M
Fetching…
Sources
Revenue
—
Net income
$-1.02M
Diluted EPS
-0.04
Operating cash flow
$5.21M
Free cash flow
$697.00K
Fetching…
Sources
Revenue
—
Net income
$16.80M
Diluted EPS
0.64
Operating cash flow
$53.38M
Free cash flow
$50.22M
Fetching…
Sources
Revenue
—
Net income
$19.63M
Diluted EPS
0.74
Operating cash flow
$-935.00K
Free cash flow
$-4.23M
Fetching…
Sources
Is it cheap or expensive?
Fair value $67.20 vs current price $32.44
Wall Street consensus is the average analyst price target: $40.75 (-39.4% lower than our fair-value estimate).
Our most-likely fair value is $67.20 a share — about 107.1% above today's price of $32.44, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $43.4M - more cash than debt. Interest coverage 363.5x.
Net debt
$-43.39M
Interest coverage
363.53x
Barrett Business Services, Inc.'s profit covers its interest bill about 363.5 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
BBSI
BASELINE
Barrett Business Services, Inc.
Total debt $24.50M Interest coverage 363.53x This is the baseline the peer rows are being compared against.
Total debt $478.00M Interest coverage -0.42x -100% vs BBSI This peer has almost no interest-payment cushion compared with BBSI.
Total debt $950.00M Interest coverage 4.88x -99% vs BBSI Carries about 74.6x less debt cushion than BBSI.
Total debt $4.62B Interest coverage 9.32x -97% vs BBSI Carries about 39.0x less debt cushion than BBSI.
Total debt $5.51B Interest coverage 12.58x -97% vs BBSI Carries about 28.9x less debt cushion than BBSI.
What you should know
The case for and against BBSI
3 Rewards
3 Risks
Rewards
-
Revenue grew 1.5% last year.
-
Returns 16.3% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Stock trades 39.8% above its 5-year average P/E.
-
Insider ownership is only 5.2% (peer median: 6.2%).
-
Operating margin compressed from 5.6% to 4.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
24.21x
Forward P/E
16.02x
P/B
3.83x
P/S
0.62x
EV/EBITDA
13.19x
PEG ratio
1.09x
Profitability
How much profit each dollar creates
Gross margin
20.6%
Operating margin
4.8%
Net margin
2.8%
ROE
16.3%
ROA
4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.12x
Current ratio
1.14x
Quick ratio
0.91x
Total debt
$24.50M
Total cash
$67.89M
Growth
How the business has been compounding
Revenue TTM
$934.41M
Revenue 5Y CAGR
14.4%
EPS TTM
1.34
EPS 5Y CAGR
8.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$36.61M
Free CF TTM
$47.18M
FCF margin
5.0%
Dividend
Shareholder payout
Yield
1.0%
Payout ratio
23.9%
Last ex-div date
2026-08-21