Barrett Business Services (NASDAQ:BBSI) Announces Quarterly Earnings Results

Key Points

• Barrett reported a quarterly EPS loss of ($0.13), which beat the consensus ($0.15) by $0.02 and revenue rose ~4.9% YoY, but GAAP net loss per share was $0.59 after a one‑time IRS disallowance tax charge of $11.6 million that the company is considering appealing.
• Operational trends showed momentum: Q1 gross billings rose 3.5% to $2.16 billion, PEO worksite employees grew ~2%, management reaffirmed full‑year guidance, workers’ compensation pricing is improving, and BBSI Benefits added clients and participants while driving new sales and retention.
• Balance sheet and capital return strength—$92 million of unrestricted cash and no debt—supported $20 million of Q1 share repurchases under a $100 million program (≈$55 million remaining) and a quarterly dividend of $0.08, while the CEO also bought shares during the quarter.

Barrett Business Services (NASDAQ:BBSI - Get Free Report) released its quarterly earnings data on Wednesday. The business services provider reported ($0.13) EPS for the quarter, beating the consensus estimate of ($0.15) by $0.02, FiscalAI reports. Barrett Business Services had a net margin of 4.39% and a return on equity of 23.67%. The business had revenue of $307.01 million during the quarter, compared to analyst estimates of $306.68 million. During the same quarter last year, the business earned ($0.04) earnings per share. Barrett Business Services's quarterly revenue was up 4.9% compared to the same quarter last year.

Here are the key takeaways from Barrett Business Services' conference call:

• BBSI reported Q1 gross billings up 3.5% to $2.16 billion (PEO +3.7%), PEO worksite employees grew ~2%, and management reaffirmed full‑year guidance for gross billings (+3–5%), WSE growth (+2–4%) and gross margin (2.7–2.85%).
• The company recorded a one‑time tax charge of $11.6 million (~$0.46/share) after IRS disallowance, which drove GAAP net loss per diluted share of $0.59; management is evaluating legal options to appeal.
• Workers' compensation pricing is improving with five consecutive months of renewal price increases and a WCIRB recommendation for an additional ~10% California advisory rate rise, which management expects will help stabilize and eventually expand margins (benefit likely realized over time).
• BBSI Benefits showed momentum — renewed 93% (97% adjusted) of the book, added ~140 clients and ~3,500 participants in Q1, benefits billings/costs rose ~56% YoY, and roughly 60% of benefits placements were new clients, indicating benefits are driving new sales and retention.
• Strong liquidity and shareholder returns — $92 million of unrestricted cash and no debt, repurchased $20 million of shares in Q1 under a $100 million program (≈$55 million remaining) and paid $2 million in dividends while continuing to invest in technology and asset‑light market expansion.

Barrett Business Services Trading Down 3.1%

Shares of NASDAQ:BBSI traded down $0.93 during trading on Wednesday, reaching $29.44. The stock had a trading volume of 179,355 shares, compared to its average volume of 236,911. The firm's 50-day simple moving average is $29.17 and its 200 day simple moving average is $34.05. The company has a market capitalization of $723.05 million, a P/E ratio of 14.09, a PEG ratio of 1.10 and a beta of 0.97. Barrett Business Services has a one year low of $25.33 and a one year high of $49.65.

Barrett Business Services Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, March 27th. Investors of record on Friday, March 13th were issued a dividend of $0.08 per share. The ex-dividend date was Friday, March 13th. This represents a $0.32 dividend on an annualized basis and a yield of 1.1%. Barrett Business Services's dividend payout ratio (DPR) is presently 15.31%.

Insider Buying and Selling

In related news, CEO Gary Kramer bought 8,370 shares of the stock in a transaction on Friday, March 13th. The stock was bought at an average price of $26.89 per share, with a total value of $225,069.30. Following the completion of the purchase, the chief executive officer directly owned 328,801 shares in the company, valued at $8,841,458.89. This represents a 2.61% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, EVP James R. Potts sold 1,803 shares of the stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $28.68, for a total transaction of $51,710.04. Following the transaction, the executive vice president directly owned 33,837 shares of the company's stock, valued at approximately $970,445.16. This trade represents a 5.06% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 4.10% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the stock. Landscape Capital Management L.L.C. acquired a new position in shares of Barrett Business Services in the fourth quarter valued at approximately $388,000. Tudor Investment Corp ET AL purchased a new position in Barrett Business Services in the 4th quarter valued at approximately $370,000. Schonfeld Strategic Advisors LLC purchased a new position in Barrett Business Services in the 4th quarter valued at approximately $352,000. Polymer Capital Management US LLC acquired a new position in shares of Barrett Business Services in the fourth quarter worth $265,000. Finally, Evolve Private Wealth LLC purchased a new stake in shares of Barrett Business Services during the fourth quarter worth $244,000. Hedge funds and other institutional investors own 86.76% of the company's stock.

Analysts Set New Price Targets

Several equities analysts have commented on the stock. Zacks Research upgraded shares of Barrett Business Services from a "strong sell" rating to a "hold" rating in a research report on Tuesday, April 28th. Barrington Research restated an "outperform" rating and issued a $41.00 target price on shares of Barrett Business Services in a report on Monday, April 27th. Finally, Roth Mkm lowered their target price on shares of Barrett Business Services from $54.00 to $42.00 and set a "buy" rating for the company in a report on Thursday, February 26th. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and two have given a Hold rating to the company's stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $41.50.

Barrett Business Services Company Profile

Barrett Business Services, Inc NASDAQ: BBSI is a professional employer organization (PEO) headquartered in Northridge, California. Founded in 1971 by Barrett K. Levesque, the company provides comprehensive human resources outsourcing solutions to small and mid-sized businesses. Through its consultative model, Barrett Business Services helps clients streamline administrative processes, mitigate regulatory risk and focus on core operations.

The company's core offerings include payroll administration, employee benefits management, workers' compensation and risk management services.

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