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NEW YORK (TheStreet) -- Barrett Business Svcs (BBSI) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BARRETT BUSINESS SVCS INC (BBSI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Professional Services industry average. The net income increased by 26.5% when compared to the same quarter one year prior, rising from $5.56 million to $7.03 million.
- BARRETT BUSINESS SVCS INC has improved earnings per share by 31.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BARRETT BUSINESS SVCS INC swung to a loss, reporting -$3.82 versus $2.39 in the prior year. This year, the market expects an improvement in earnings ($3.31 versus -$3.82).
- The debt-to-equity ratio of 1.17 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, BBSI maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Professional Services industry and the overall market, BARRETT BUSINESS SVCS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: BBSI Ratings Report
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