Barrett Business Services, Inc. (NASDAQ:BBSI) Released Earnings Last Week And Analysts Lifted Their Price Target To US$144
Investors in Barrett Business Services, Inc. (NASDAQ:BBSI) had a good week, as its shares rose 4.2% to close at US$120 following the release of its full-year results. Barrett Business Services reported US$1.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$7.39 beat expectations, being 3.6% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Barrett Business Services
Taking into account the latest results, the most recent consensus for Barrett Business Services from four analysts is for revenues of US$1.16b in 2024. If met, it would imply a decent 8.3% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$7.66, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$1.15b and earnings per share (EPS) of US$7.70 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 9.9% to US$144. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Barrett Business Services, with the most bullish analyst valuing it at US$159 and the most bearish at US$135 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Barrett Business Services' rate of growth is expected to accelerate meaningfully, with the forecast 8.3% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Barrett Business Services to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Barrett Business Services analysts - going out to 2025, 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.
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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.
