Are Investors Undervaluing Barrett Business Services (BBSI) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Barrett Business Services (BBSI). BBSI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.20, which compares to its industry's average of 20.95. Over the last 12 months, BBSI's Forward P/E has been as high as 15.71 and as low as 5.28, with a median of 12.53.

Investors should also note that BBSI holds a PEG ratio of 0.85. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BBSI's industry currently sports an average PEG of 1.96. Over the last 12 months, BBSI's PEG has been as high as 1.25 and as low as 0.38, with a median of 1.01.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BBSI has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.7.

Finally, we should also recognize that BBSI has a P/CF ratio of 7.92. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BBSI's P/CF compares to its industry's average P/CF of 10.12. Over the past year, BBSI's P/CF has been as high as 13.49 and as low as 4.30, with a median of 8.96.

These are just a handful of the figures considered in Barrett Business Services's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BBSI is an impressive value stock right now.

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