Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Barrett (NASDAQ:BBSI) and the best and worst performers in the professional staffing & hr solutions industry.
The Professional Staffing & HR Solutions subsector within Business Services is set to benefit from evolving workforce trends, including the rise of remote work and the gig economy. With companies casting a wider net to find talent due to remote work, the expertise of staffing and recruiting companies is even more valuable. For those who invest wisely, the use of predictive AI in recruitment and screening as well as automation in HR workflows can enhance efficiency and scalability. On the other hand, digitization means that talent discovery is less of a manual process, opening the door for tech-first platforms. Additionally, regulatory scrutiny around data privacy in HR is evolving and may require companies in this sector to change their go-to-market strategies over time.
The 8 professional staffing & HR solutions stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 0.7% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.2% since the latest earnings results.
Best Q4: Barrett (NASDAQ:BBSI)
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Barrett reported revenues of $304.8 million, up 10.2% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was a strong quarter for the company with a decent beat of analysts’ EPS estimates.
"We finished 2024 on a strong note, achieving 10% growth in both revenue and gross billings during the fourth quarter, which helped drive a 15% increase in earnings," said BBSI President and CEO Gary Kramer.
Barrett Total Revenue
Barrett scored the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.4% since reporting and currently trades at $39.90.
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
ManpowerGroup reported revenues of $4.4 billion, down 5% year on year, in line with analysts’ expectations. The business had a strong quarter with a solid beat of analysts’ organic revenue estimates and a narrow beat of analysts’ EPS estimates.
ManpowerGroup Total Revenue
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 14.8% since reporting. It currently trades at $51.45.
Processing approximately 100 million background checks annually across more than 200 countries and territories, First Advantage (NASDAQ:FA) provides employment background screening, identity verification, and compliance solutions to help companies manage hiring risks.
First Advantage reported revenues of $307.1 million, up 51.6% year on year, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
First Advantage delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 24.2% since the results and currently trades at $14.06.
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Alight reported revenues of $680 million, down 1.6% year on year. This print met analysts’ expectations. Taking a step back, it was a slower quarter as it recorded a significant miss of analysts’ full-year EPS guidance estimates.
Alight had the weakest full-year guidance update among its peers. The stock is down 22.6% since reporting and currently trades at $5.18.
Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE:NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.
Insperity reported revenues of $1.61 billion, up 2.1% year on year. This number topped analysts’ expectations by 0.9%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ EPS estimates.
The stock is up 19.5% since reporting and currently trades at $83.32.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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