Bgsf, Inc. (NYSE: BGSF)

Sector: Industrials Industry: Staffing & Employment Services CIK: 0001474903
Market Cap 62.44 Mn
P/B 0.98
P/E 31.58
P/S 0.30
ROIC (Qtr) -8.44
Div Yield % 45.00
Rev 1y % (Qtr) -9.82
Total Debt (Qtr) 1.38 Mn
Debt/Equity (Qtr) 0.03
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About

BGSF, Inc., also known as Building and Services Group, operates primarily within the United States in the staffing and recruiting industry. The company specializes in two segments: Property Management and Professional. BGSF provides workforce solutions, consulting services, and managed services to a diverse customer base, including small and medium-sized companies and divisions of Fortune 500 companies. The Property Management segment is a leading provider of office and maintenance talent, operating in 38 states and the District of Columbia. This...

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Investment thesis

Bull case

  • Strong operating cash flow of 1.59M provides robust 1.16x coverage of total debt 1.38M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 43.11M provide 44.35x coverage of short-term debt 972000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 76.24M provides 55.45x coverage of total debt 1.38M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 1.20M exceeds capital expenditure of 392000 by 3.05x, indicating strong organic growth funding capability.
  • Strong cash position of 43.11M provides 1.54x coverage of other current liabilities 28.08M, indicating excellent liquidity.

Bear case

  • Operating cash flow of 1.59M barely covers its investment activities of 90.94M, with a coverage ratio of 0.02, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 43.11M provide limited coverage of acquisition spending of 91.53M, which is 0.47x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 1.59M shows concerning coverage of stock compensation expenses of 1.05M, with a 1.51 ratio indicating potential earnings quality issues.
  • Operating cash flow of 1.59M provides minimal -1.57x coverage of tax expenses of (1.01M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (6.32M) show weak coverage of depreciation charges of 3.30M, with a -1.91 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Staffing & Employment Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TNET Trinet Group, Inc. 2.92 Bn 13.22 0.86 0.94 Bn
2 KFY Korn Ferry 2.76 Bn 66.66 3.91 0.55 Bn
3 RHI Robert Half Inc. 2.48 Bn 18.65 0.46 0.25 Bn
4 MAN ManpowerGroup Inc. 1.76 Bn 3.55 0.08 1.64 Bn
5 KFRC Kforce Inc 1.11 Bn -12.63 1.14 0.07 Bn
6 BBSI Barrett Business Services Inc 0.94 Bn 17.65 1.01 0.03 Bn
7 NSP Insperity, Inc. 0.92 Bn -131.16 0.13 0.44 Bn
8 KELYA Kelly Services Inc 0.33 Bn -1.29 0.08 0.16 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.29 0.72
EV to Cash from Ops. EV/CFO 4.82 13.34
EV to Debt EV to Debt 78.17 16.96
EV to EBIT EV/EBIT 33.30 6.77
EV to EBITDA EV/EBITDA 22.58 5.70
EV to Free Cash Flow [EV/FCF] EV/FCF 5.44 27.09
EV to Market Cap EV to Market Cap 1.72 0.88
EV to Revenue EV/Rev 0.52 0.75
Price to Book Value [P/B] P/B 0.98 2.96
Price to Earnings [P/E] P/E 31.58 -37.77
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.44
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -81.87
Dividend per Basic Share Div per Share (Qtr) 2.00 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 1,851.85 115.87
Interest Coverage Int. cover (Qtr) -1.06 -11.60
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 76.11 24.71
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 1,731.27 155.53
Dividend Growth (1y) % Div 1y % (Qtr) 566.67 35.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -229.90 -2,529.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -180.17 -29.98
EBIT Growth (1y) % EBIT 1y % (Qtr) -259.60 -51.52
EBT Growth (1y) % EBT 1y % (Qtr) -917.89 -79.33
EPS Growth (1y) % EPS 1y % (Qtr) -750.00 -2,182.39
FCF Growth (1y) % FCF 1y % (Qtr) -95.18 229.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -12.61 12.54
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.13 1.87
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.36
Cash Ratio Cash Ratio (Qtr) 1.33 0.80
Current Ratio Curr Ratio (Qtr) 1.97 1.85
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 1.53
Interest Cover Ratio Int Coverage (Qtr) -1.06 -11.60
Times Interest Earned Times Interest Earned (Qtr) -1.06 -11.60
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -1.70 -8.99
EBIT Margin % EBIT Margin % (Qtr) -3.55 -51.06
EBT Margin % EBT Margin % (Qtr) -6.89 -11.99
Gross Margin % Gross Margin % (Qtr) 34.00 33.35
Net Profit Margin % Net Margin % (Qtr) -6.30 -13.87