BGSF reported a decline in first-quarter revenue, posting $63.23 million compared to $68.77 million in the same period last year. Despite the drop, the company's Chair, President, and CEO noted strengthening business outcomes as the quarter progressed. There are also indications of continued improvement into the second quarter.
The company remains focused on its restructuring plan initiated in late 2024, aimed at optimizing operations through strategic moves. In the Professional segment, BGSF experienced a 5.6% revenue increase in the first quarter over the previous quarter. However, the Property Management segment faced the usual seasonal downturn in revenue. On a positive note, the gross margins in this segment showed sequential improvement.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for BGSF Inc (BGSF, Financial) is $10.50 with a high estimate of $12.00 and a low estimate of $9.00. The average target implies an upside of 228.13% from the current price of $3.20. More detailed estimate data can be found on the BGSF Inc (BGSF) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, BGSF Inc's (BGSF, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
BGSF Key Business Developments
Release Date: March 12, 2025
- Fourth-Quarter Revenue: $64.4 million, down from $73.6 million in Q4 2023.
- Professional Segment Revenue: Declined 8.7% year over year and 3% sequentially; grew 2% sequentially on a billing day-adjusted basis.
- Gross Profit: $21.5 million with a margin of 33.3%, compared to 34.6% in the prior year.
- SG&A Expenses: $20.8 million, compared to $22.0 million in Q3 and $20.2 million in Q4 2023.
- Adjusted EBITDA: $1.4 million or 2.2% of revenue, versus $3.4 million or 4.8% in Q3.
- Net Income: GAAP loss of $0.10 per diluted share; adjusted loss of $0.06 per diluted share.
- Cost Savings Initiatives: Expected cash savings of $7 million to $9 million in 2025 from restructuring.
- IT Middleware Savings: Anticipated $800,000 annual savings from shifting to lower-cost nearshore support.
- Property Management Revenue: 23% increase in revenue from territory-mapping initiative.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BGSF Inc (BGSF, Financial) announced a significant restructuring plan aimed at reducing costs and improving operational performance, with expected cash savings of approximately $7 million to $9 million in 2025.
- The company has been recognized as one of the best places for working parents for the fifth consecutive year.
- BGSF Inc (BGSF) added 15 new logos in Q4 and saw a 30% increase in signed Master Service Agreements compared to Q4 of 2023.
- The territory-mapping initiative in key markets drove a 23% increase in revenue and remains a top priority for expansion in 2025.
- The advanced lead generation engine launched in Q3 generated $2 million in revenue for the Property Management team within six months, and its expansion to finance and accounting teams is showing positive early results.
Negative Points
- Fourth-quarter revenue was $64.4 million, down from $73.6 million in Q4 of 2023, reflecting declines in both business segments.
- The Property Management segment experienced a larger-than-normal seasonality decline due to restructuring and credit risk actions.
- Gross profit margin decreased to 33.3% in Q4 from 34.6% in the prior year, largely due to increased competition and economic pressures in Property Management.
- The company reported a GAAP loss of $0.10 per diluted share and an adjusted loss of $0.06 per diluted share in Q4.
- Economic and political uncertainties have created a more cautious environment, impacting the strategic alternative process timeline.
