Barrett Business Services Q3 revenue slightly beats on higher average billings per employee

Overview

• Business management solutions provider's Q3 revenue rose 5%, a slight beat of analyst expectations

• Net income for Q3 fell year-over-year amid soft client hiring trends

• Company repurchased $9 mln in stock during Q3

Outlook

• Company expects 2026 gross billings growth of 3% to 4%

• Company sees 2026 average WSE growth of 1% to 2%

• Company expects 2026 gross margin as percent of gross billings at 2.70% to 2.75%

Result Drivers

• PEO SERVICES GROWTH - Co said revenue growth was driven by increased worksite employees from net new clients and higher average billings per employee

• RATE INCREASES - Co said improved conditions in the workers' compensation market and ability to secure rate increases supported results

• LOWER FAVORABLE ADJUSTMENTS - Co said workers' compensation expense included smaller favorable adjustments than a year ago

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the employment services peer group is "buy"

• Wall Street's median 12-month price target for Barrett Business Services Inc is $40.50, about 23.7% above its November 3 closing price of $32.73

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 20 three months ago

Reuters Recommended Reads

• Nov 2 - Upwork Q3 revenue beats analyst estimates; acquires WorkMotion to strengthen enterprise offering

• Nov 3 - Huron Consulting Q3 revenue rises

• Nov 4 - US private payrolls rise in October, ADP says

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)