| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 252.89 | 487 |
| Intrinsic value (DCF) | 7.99 | -81 |
| Graham-Dodd Method | 12.17 | -72 |
| Graham Formula | 30.13 | -30 |
Barrett Business Services, Inc. (BBSI) is a leading provider of business management solutions tailored for small and mid-sized companies across the United States. Specializing in professional employer organization (PEO) services, BBSI offers a unique management platform that blends consulting expertise with HR outsourcing tools. The company operates under a co-employment model, handling payroll, workers' compensation, and administrative functions while allowing clients to retain control over their workforce. Additionally, BBSI provides staffing and recruiting services, including contract staffing, direct placement, and on-site management solutions. Serving diverse industries such as manufacturing, agriculture, transportation, and construction, BBSI has established itself as a trusted partner for businesses seeking scalable workforce solutions. Headquartered in Vancouver, Washington, the company has been a key player in the staffing and employment services sector since 1965, leveraging its deep industry knowledge to drive efficiency and compliance for its clients.
Barrett Business Services (BBSI) presents a compelling investment opportunity in the growing PEO and staffing services market, supported by its niche focus on small and mid-sized businesses. The company's integrated consulting and HR outsourcing model provides a competitive edge, though its relatively modest net margin (~4.6%) and cyclical exposure to industries like construction and manufacturing warrant caution. With a market cap of ~$1.06B and a beta of 1.01, BBSI offers moderate risk/reward exposure to labor market trends. Positive factors include consistent revenue ($1.14B in latest reporting) and a dividend yield (~1.6% at current prices), but investors should monitor wage inflation pressures and client concentration risks in its core industries.
BBSI competes in the fragmented PEO and staffing industry by differentiating its 'consulting-first' approach, combining operational advisory services with HR outsourcing—a hybrid model less common among pure-play PEOs. Its focus on small/mid-market clients (typically with 10–500 employees) allows for deeper relationships compared to enterprise-focused competitors. The company's workers' compensation expertise, particularly in high-risk industries like construction and manufacturing, provides a technical moat. However, BBSI lacks the scale of national PEO leaders, which limits its ability to negotiate bulk insurance rates or invest heavily in technology. Its regional concentration in the Western U.S. (though expanding) also creates geographic vulnerability. Financially, BBSI's capital-light model generates steady cash flows, but its ~4.6% net margin trails larger peers like TriNet (TNET) (~7–9% margins), reflecting competitive pricing pressures. The rise of HR tech platforms (e.g., Gusto, Rippling) poses a long-term threat to traditional PEOs, though BBSI's consultative positioning may help retain clients valuing hands-on service.