BBSI
Barrett Business Services, Inc.
$39.16
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 9.4% above fair value
You pay
$39.16
Bear
$30.18
Fair
$35.81
Bull
$40.94
Bear
$30.18
-22.9%
4% stage 1 growth, 11% discount
Fair
$35.81
-8.6%
7% stage 1 growth, 11% discount
Bull
$40.94
+4.6%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
21.0x
Market is pricing in (growth)
9.7%
vs 7.1% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $46.00 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $35.81 per share.
Warnings
Wall Street's average price target is $46.00 (from 5 analysts). Our estimate is 28% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions