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What Awaits Barrett Business Services (BBSI) in Q2 Earnings?

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Barrett Business Services, Inc. (BBSI - Free Report) is scheduled to report second-quarter 2019 results on Aug 7.

So far this year, shares of Barrett Business Services have gained 52.8% compared with 27.8% rise of the industry it belongs to.

 

Let's check out how things are shaping up for the announcement.

Barrett Business Services’ bottom line in the to-be-reported quarter is likely to be driven by operational efficiency. The company has been successfully reducing frictional costs from its model, while keeping pricing firm. Decreases in payroll taxes and workers’ compensation expense (as a percentage of revenues) has also contributed to margin expansion.

The Zacks Consensus Estimate for earnings stands at $1.64 per share, indicating growth of 12.3% from the year-ago period reported figure. In the first-quarter of 2019, the company reported a loss of 31 cents per share. The company usually incurs loss in the first quarter due to the higher effective payroll taxes at the beginning of each year.

The company’s top line should benefit from strength across its professional employer service fee revenues, which is likely to be partially offset by weakness in its staffing services revenues. While solid client additions are expected to contribute to professional employer service fees, tight labor market conditions are likely to weigh on staffing services.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Barrett Business Services has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings:

S&P Global (SPGI - Free Report) has an Earnings ESP of +0.14% and a Zacks Rank #2.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Broadridge (BR - Free Report) has an Earnings ESP of +1.09% and a Zacks Rank #3.

Automatic Data Processing (ADP - Free Report) has an Earnings ESP of +0.06% and a Zacks Rank #3.

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