Barrett Business Services (NASDAQ:BBSI) Posts Earnings Results, Misses Expectations By $0.36 EPS

Barrett Business Services (NASDAQ:BBSI) announced its quarterly earnings data on Wednesday. The business services provider reported $0.20 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.56 by ($0.36), FiscalAI reports. The business had revenue of $319.27 million during the quarter, compared to analysts’ expectations of $321.55 million. Barrett Business Services had a net margin of 3.24% and a return on equity of 22.89%.

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

• New-client momentum remained strong: Q2 acquisitions increased 17% year over year, adding approximately 4,500 worksite employees from net new clients, while client retention remained solid.
• BBSI reported encouraging progress in its benefits and expansion initiatives, adding about 70 benefits clients and more than 2,000 participants in Q2; asset-light markets grew 73% and added approximately 400 worksite employees.
• Management believes California workers’ compensation pricing has reached an inflection point, with eight consecutive months of rate increases that are expected to offset claims-cost inflation and support gross-margin improvement in 2027.
• Macroeconomic and geopolitical pressures continued to drive workforce reductions among existing clients, particularly in construction, limiting overall growth; staffing revenue declined 18% year over year.
• The company narrowed its 2026 outlook to 3%–4% gross-billings growth, 2%–3% average worksite-employee growth, and a 2.70%–2.75% gross margin range. Q2 diluted EPS fell to $0.52 from $0.70 in the prior-year quarter.

Barrett Business Services Price Performance

BBSI traded up $0.03 during midday trading on Wednesday, reaching $40.11. 295,106 shares of the company’s stock traded hands, compared to its average volume of 242,049. Barrett Business Services has a 52 week low of $25.33 and a 52 week high of $49.65. The firm has a fifty day moving average of $36.35 and a two-hundred day moving average of $33.12. The stock has a market capitalization of $985.10 million, a price-to-earnings ratio of 26.05, a P/E/G ratio of 1.33 and a beta of 0.94.

Wall Street Analyst Weigh In

BBSI has been the topic of a number of recent research reports. Wall Street Zen raised Barrett Business Services from a “sell” rating to a “hold” rating in a research note on Saturday, June 6th. Zacks Research raised Barrett Business Services from a “strong sell” rating to a “hold” rating in a research note on Tuesday, April 28th. Weiss Ratings raised Barrett Business Services from a “hold (c-)” rating to a “hold (c)” rating in a research note on Monday, July 13th. Finally, Barrington Research reaffirmed an “outperform” rating and issued a $41.00 target price on shares of Barrett Business Services in a research note on Monday, April 27th. One 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, the company currently has an average rating of “Moderate Buy” and an average target price of $41.50.

Insider Buying and Selling

In other news, EVP James R. Potts sold 3,490 shares of the business’s stock in a transaction that occurred on Tuesday, July 7th. The stock was sold at an average price of $38.00, for a total transaction of $132,620.00. Following the transaction, the executive vice president directly owned 32,035 shares of the company’s stock, valued at approximately $1,217,330. The trade was a 9.82% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Anthony Meeker sold 12,000 shares of the company’s stock in a transaction that occurred on Thursday, July 2nd. The shares were sold at an average price of $37.85, for a total value of $454,200.00. Following the transaction, the director owned 44,945 shares of the company’s stock, valued at approximately $1,701,168.25. This represents a 21.07% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 20,779 shares of company stock worth $786,233. Corporate insiders own 4.80% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in BBSI. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in shares of Barrett Business Services by 4.3% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 15,219 shares of the business services provider’s stock valued at $626,000 after purchasing an additional 633 shares in the last quarter. Millennium Management LLC bought a new position in Barrett Business Services in the first quarter worth about $3,747,000. Jane Street Group LLC purchased a new stake in Barrett Business Services in the first quarter worth about $1,732,000. Creative Planning lifted its holdings in Barrett Business Services by 71.8% in the second quarter. Creative Planning now owns 9,778 shares of the business services provider’s stock worth $408,000 after buying an additional 4,085 shares during the period. Finally, American Century Companies Inc. boosted its position in Barrett Business Services by 40.8% during the 2nd quarter. American Century Companies Inc. now owns 37,923 shares of the business services provider’s stock valued at $1,581,000 after acquiring an additional 10,994 shares in the last quarter. 86.76% of the stock is currently owned by institutional investors.

About Barrett Business Services

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.