Barrett Business Services, Inc. (NASDAQ:BBSI) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Barrett Business Services reported in line with analyst predictions, delivering revenues of US$1.1b and statutory earnings per share of US$1.98, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Barrett Business Services
After the latest results, the four analysts covering Barrett Business Services are now predicting revenues of US$1.23b in 2025. If met, this would reflect a modest 7.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.0% to US$2.17. Before this earnings report, the analysts had been forecasting revenues of US$1.22b and earnings per share (EPS) of US$2.22 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$46.75, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Barrett Business Services analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$45.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Barrett Business Services is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Barrett Business Services' rate of growth is expected to accelerate meaningfully, with the forecast 7.5% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Barrett Business Services is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Barrett Business Services. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Barrett Business Services analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Barrett Business Services' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.