Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.2 |
| P/S | 9.9 |
| EV/EBITDA | 3.8 |
| Fwd P/E | 7.5 |
| PEG | 6.7 |
| Analyst target | 6.0 |
- ▸Forward P/E: 16.5x
- ▸PEG: 1.08
BBSI · Why this verdict
Why Barrett Business Services (BBSI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.0/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Barrett Business Services trades at a 16.4x forward P/E with conservative debt, but heavy reliance on third-party workers' compensation insurers, weak growth, a mixed earnings record and only 4.3% upside to the analyst target limit the case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
About 86% of the insured program depends on third-party workers' compensation insurers, a HIGH concentration risk. Bear case | Insurer relationships and terms remain stable and the dependence share does not rise. | ↓Deteriorating |
| CounterRepricing or exit by an insurer would hit margins directly, and the lack of alternatives gives the company little leverage. | ||
Valuation is a forward P/E of 16.4x with a PEG of 1.11, which is fair rather than cheap for a business with a 1.8/10 growth score. Valuation breakdown | Earnings grow enough to keep the PEG near or below 1.1. | ↑Improving |
| CounterWeak growth leaves no growth premium to support the multiple, and a PEG above 1 offers no discount. | ||
Barrett has beaten estimates in 1 of the last 3 reported quarters with 2 misses, and reports in 11 days. Earnings | EPS beats resume at the 2026-11-04 report. | →Stable |
| CounterTwo misses in three quarters show estimate risk, and an officer change adds uncertainty. | ||
The price of $33.22 sits 4.3% below the analyst target of $34.64 against 9.9% downside to the stop, giving reward-to-risk of 0.43. Targets | Price rises toward $34.64 after earnings. | ↑Improving |
| CounterDownside is more than twice the upside, so the setup is unfavorable even if the thesis plays out. | ||
Price is above the 200-day average with a flat slope and rising on-balance volume, a range-bound base after a death-cross recovery. Momentum breakdown | Price holds above the 200-day average and above the $31.46 stop. | →Stable |
| CounterA flat average gives no trend confirmation, and high implied volatility of 65% suggests the range can break either way. | ||
About 86% of the insured program depends on third-party workers' compensation insurers, a HIGH concentration risk.
↓DeterioratingBear case
- Expectation
- Insurer relationships and terms remain stable and the dependence share does not rise.
CounterRepricing or exit by an insurer would hit margins directly, and the lack of alternatives gives the company little leverage.
Valuation is a forward P/E of 16.4x with a PEG of 1.11, which is fair rather than cheap for a business with a 1.8/10 growth score.
↑ImprovingValuation breakdown
- Expectation
- Earnings grow enough to keep the PEG near or below 1.1.
CounterWeak growth leaves no growth premium to support the multiple, and a PEG above 1 offers no discount.
Barrett has beaten estimates in 1 of the last 3 reported quarters with 2 misses, and reports in 11 days.
→StableEarnings
- Expectation
- EPS beats resume at the 2026-11-04 report.
CounterTwo misses in three quarters show estimate risk, and an officer change adds uncertainty.
The price of $33.22 sits 4.3% below the analyst target of $34.64 against 9.9% downside to the stop, giving reward-to-risk of 0.43.
↑ImprovingTargets
- Expectation
- Price rises toward $34.64 after earnings.
CounterDownside is more than twice the upside, so the setup is unfavorable even if the thesis plays out.
Price is above the 200-day average with a flat slope and rising on-balance volume, a range-bound base after a death-cross recovery.
→StableMomentum breakdown
- Expectation
- Price holds above the 200-day average and above the $31.46 stop.
CounterA flat average gives no trend confirmation, and high implied volatility of 65% suggests the range can break either way.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.4 |
| ROA | 3.1 |
| Gross margin | 0.1 |
| Op margin | 1.9 |
| Net margin | 1.4 |
| Current ratio | 4.4 |
| FCF quality | 8.0 |
| Moat | 5.8 |
| Piotroski F | 6.7 |
Growth
1.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
| EPS growth | 0.0 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 9.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 6.3 |
| Price target | 8.1 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 24%
Insider
4.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.7 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.9 |
| quality rank | 6.1 |
| growth rank | 5.6 |
- ▸Conservative debt levels
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.5 |
| support resistance | 2.6 |
| 52w position | 4.6 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 5.0 |
| volatility | 5.5 |
| put call | 6.7 |
| implied vol | 0.3 |
| beta | 7.6 |
| debt equity | 9.5 |
- ▸High IV: 78%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| dividend safety | 6.8 |
| news activity | 5.0 |
- ▸Earnings concerns: 1B/2M
- ▸Earnings in 1 day
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.8<1.5@spot
- EARNINGS_PROXIMITY:1d<=7d
Warning (2)
- DEATH_CROSS:momentum=6.5>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.85
Upside
+5.2%
Downside
6.2%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 58, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 6.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.8<1.5@spot, EARNINGS_PROXIMITY:1d<=7d) reinforce the read. Current asymmetry R:R is 0.85 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 6.9, Value at 6.6, and Momentum at 6.5; the weakest are Growth at 1.8, Technical at 3.2, and Quality at 4.1. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 0.85 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Insurer Counterparty Concentration
Trip ifThird-party insurer share exceeds 90% from the current 86%.
- P2Fair Valuation For Growth
Trip ifForward P/E rises above 20x from the current 16.4x.
- P3Mixed Earnings Record
Trip ifEPS beats total less than 2 of the next 4 quarters (currently 1 of 3).
- P4Thin Analyst Upside
Trip ifAnalyst target falls below $33.22 from the current $34.64.
- P5Flat Trend Volume Accumulation
Trip ifPrice falls below the $31.46 stop level from the current $33.22.