Q2 Earnings Outperformers: Barrett (NASDAQ:BBSI) And The Rest Of The Professional Staffing & HR Solutions Stocks

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how professional staffing & HR solutions stocks fared in Q2, starting with Barrett (NASDAQ:BBSI).

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 Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.1% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 16.7% since the latest earnings results.

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 $307.7 million, up 10% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

“BBSI sustained its positive momentum, delivering another strong quarter of net new client growth,” said Gary Kramer, President and CEO of BBSI.

Interestingly, the stock is up 1.1% since reporting and currently trades at $44.87.

Is now the time to buy Barrett? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: First Advantage (NASDAQ:FA)

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 $390.6 million, up 112% year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

First Advantage achieved the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.5% since reporting. It currently trades at $15.01.

Is now the time to buy First Advantage? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q2: Insperity (NYSE:NSP)

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 $1.66 billion, up 3.3% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.

Insperity delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19.8% since the results and currently trades at $47.79.

Read our full analysis of Insperity’s results here.

Alight (NYSE:ALIT)

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 $528 million, down 1.9% year on year. This print topped analysts’ expectations by 0.6%. However, it was a slower quarter as it recorded EPS in line with analysts’ estimates and full-year revenue guidance missing analysts’ expectations.

Alight had the weakest full-year guidance update among its peers. The stock is down 37.8% since reporting and currently trades at $3.20.

Read our full, actionable report on Alight here, it’s free for active Edge members.

Kforce (NYSE:KFRC)

With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE:KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.

Kforce reported revenues of $334.3 million, down 6.2% year on year. This result met analysts’ expectations. Aside from that, it was a softer quarter as it produced a significant miss of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter missing analysts’ expectations.

The stock is down 36.5% since reporting and currently trades at $29.77.

Read our full, actionable report on Kforce here, it’s free for active Edge members.

Market Update

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.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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