BBSI Stock Forecast & Price Target

Barrett Business Services is facing short-term challenges due to reduced employee levels at existing clients, which has resulted in a decline in revenue and adjusted EBITDA, causing their EPS forecast to be reduced. However, the company's long-term growth potential remains strong with a 5% year-over-year increase in total revenue, a strong sales pipeline, and a record number of WSEs added from new clients. While margins may be impacted by a low rate workers' compensation environment, BBSI's management has plans to increase workers' compensation rates and has taken steps to reduce potential exposure to loss claims. Their reliance on referral networks for new client leads may be a potential risk, but BBSI has a strong reputation and relationships with their referral partners. Overall, the challenges faced in Q4/25 present potential upside in the future and solid long-term growth prospects for the company.

Barrett Business Services is expected to experience operational difficulties in their Staffing segment due to economic downturns and potential job growth declines. Additionally, the company's concentration of operations in California leaves them vulnerable to changes in economic and regulatory conditions in the state. The relatively high valuation of BBSI shares may not be justified as the company's profitability and growth potential are at risk. With a predicted decline in gross billings and WSE growth in 2026, we are reducing our 2026 EPS forecast to $1.90 from $2.30 and introducing our initial 2027 EPS forecast of $2.15, and we have lowered our 12-month price target on BBSI shares to $41 from $46.