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Analysts Are Much More Bearish On BG Staffing, Inc. (NYSE:BGSF) Than They Used To Be

Simply Wall St
·3 min read

Market forces rained on the parade of BG Staffing, Inc. (NYSE:BGSF) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the consensus from dual analysts covering BG Staffing is for revenues of US$280m in 2020, implying a perceptible 6.6% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 69% to US$0.38 in the same period. Previously, the analysts had been modelling revenues of US$315m and earnings per share (EPS) of US$0.91 in 2020. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for BG Staffing

NYSE:BGSF Past and Future Earnings May 14th 2020
NYSE:BGSF Past and Future Earnings May 14th 2020

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. We would highlight that sales are expected to reverse, with the forecast 6.6% revenue decline a notable change from historical growth of 8.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.8% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - BG Staffing is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for BG Staffing. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on BG Staffing, and a few readers might choose to steer clear of the stock.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with BG Staffing, including a weak balance sheet. Learn more, and discover the 5 other warning signs we've identified, for free on our platform here.

We also provide an overview of the BG Staffing Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.