It's been a mediocre week for Barrett Business Services, Inc. (NASDAQ:BBSI) shareholders, with the stock dropping 15% to US$33.18 in the week since its latest quarterly results. Revenues of US$319m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.52, missing estimates by 6.3%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, Barrett Business Services' four analysts currently expect revenues in 2026 to be US$1.29b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 15% to US$1.22 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.30b and earnings per share (EPS) of US$1.53 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$40.75, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Barrett Business Services at US$44.00 per share, while the most bearish prices it at US$38.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Barrett Business Services' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.7% growth on an annualised basis. This is compared to a historical growth rate of 6.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Barrett Business Services.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Barrett Business Services. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$40.75, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Barrett Business Services analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though.

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.