Zacks Investment Research downgraded
Barrett Business Services Inc.
) to a Zacks Rank #5 (Strong Sell) on Jun 12, 2014. Also, the
company witnessed downward estimate revisions over the past 60
Why the Downgrade?
Following a negative earnings surprise of 2.0% in the last quarter
and a tepid current guidance, Barrett Business Services witnessed
downward estimate revisions for the second quarter and fiscal 2014
over the past 60 days. Consequently, the Zacks Consensus Estimate
for the second quarter declined from $1.01 to 93 cents per share
while that for fiscal 2014 declined from $3.17 to $2.96 per share
over the same timeframe.
Shares of Barrett Business Services slumped 3.8% on Jun 11, which
represented a one-year negative return of 22.2% and a negative
year-to-date return of 49.5%.
Barrett Business Services reported dismal first-quarter 2014
results on Apr 29 wherein its loss per share came in wider than
both the Zacks Consensus Estimate as well as the year-ago quarter,
primarily due to higher effective payroll taxes and a higher share
count. Although the company reported a year-over-year increase in
revenues, this lagged the Zacks Consensus Estimate.
However, Barrett Business Services has a growing product pipeline
that could help it build a healthy client base in the future.
Nonetheless, it's likely that the company's investments in
operational infrastructure improvements will continue to impact
margins in the near term. The growing competition from
) and Insperity, Inc. and macro uncertainty are also headwinds,
Other Stocks to Consider
Some better-ranked stocks that are worth considering are
Micron Technology Inc.
). While Micron sports a Zacks Rank #1 (Strong Buy), SanDisk has a
Zacks Rank #2 (Buy).
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