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1. Company Snapshot

1.a. Company Description

BGSF, Inc.provides workforce solutions and placement services in the United States.It operates in two segments, Real Estate and Professional.


The Real Estate segment offers office and maintenance field talent to various apartment communities and commercial buildings.The Professional segment provides skilled IT professionals with expertise in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management, and other IT workforce solutions, as well as finance, accounting, legal, human resource, and related support personnel.Its client partners include Fortune 500 companies, and medium and small companies, as well as consulting companies that engage in systems integration projects.


The company was formerly known as BG Staffing, Inc.and changed its name to BGSF, Inc.in February 2021.


BGSF, Inc.was incorporated in 2007 and is based in Plano, Texas.

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1.b. Last Insights on BGSF

BGSF, Inc.'s recent performance was driven by the sale of its professional division for $99 million, significantly improving liquidity and balance sheet strength. The company reported Q2 revenue of $23.5 million, with a sequential increase from Q1. Despite a revenue miss, the company's property management segment shows potential for stable profitability. The cash infusion from the sale enables BGSF to pay off debt and potentially invest for growth. BGSF was upgraded to a Strong Buy, suggesting growing optimism about its earnings prospects.

1.c. Company Highlights

2. BGSF's Strategic Shift: Navigating Challenges and Opportunities

BGSF, Inc.'s Fiscal 2025 Third Quarter Financial Results revealed a mixed performance, with the Property Management Group reporting revenues of $26.9 million, down 9.8% year-over-year, primarily due to cost pressures on property owners and increased competition. However, revenues improved sequentially by 14.4% over the second quarter. Gross profit and margins in the third quarter were $9.7 million and 35.9%, respectively. The company's adjusted EBITDA was $980,000 or 3.6% of revenue. The actual EPS came out at -$0.28, slightly better than estimates at -$0.29.

Publication Date: Nov -24

📋 Highlights
  • Divestiture and Capital Return:: Sold Professional division for $96.5M (plus $2.5M adjustment), repaid $46M debt, and returned $22.4M to shareholders via a $2/share special dividend.
  • Property Management Performance:: Q3 revenue fell 9.8% YoY to $26.9M but rose 14.4% sequentially, with gross profit of $9.7M (35.9% margin) and adjusted EBITDA of $980K (3.6% of revenue).
  • Strategic Market Study:: Identified $1B+ addressable market opportunities, operational improvements, and expansion plans to capture growth in competitive property management sector.
  • Share Buyback Plan:: Announced $5M stock repurchase program, signaling confidence in long-term strategy and capital allocation flexibility.
  • 2026 Revenue Growth Target:: Plans to reduce G&A expenses by $11M/year and invest in AI initiatives, aiming for higher revenues in 2026 compared to 2025.

Financial Performance and Position

The company's cash balance as of September 30 was approximately $20 million, following the sale of its Professional division to INSPYR Solutions for $96.5 million plus a $2.5 million working capital adjustment. The proceeds were used to pay off $46 million in debt and distribute a special cash dividend of $2 per share, returning $22.4 million to shareholders. SG&A expenses for the third quarter were $10.2 million.

Strategic Review and Future Outlook

BGSF engaged in a comprehensive review of its business and the broader industry landscape, identifying actionable operational performance improvements and near- and longer-term expansion opportunities to capture a meaningful share of a growing $1 billion-plus addressable market. As the company's management noted, the market study provided valuable insights into its competitive position and market dynamics. The company expects 2026 revenues to grow compared to 2025, with analysts estimating a revenue growth rate of 3.1%.

Valuation and Investment Considerations

With a P/S Ratio of 0.2 and an EV/EBITDA of 38.12, the market seems to be pricing in significant growth expectations. The company's decision to announce a stock buyback plan of up to $5 million reflects its confidence in BGSF's long-term strategy. Additionally, the expected reduction in head office G&A expenses by approximately $11 million annually and investments in AI to enhance performance are positive steps. The current valuation metrics suggest that while there are challenges, there are also potential opportunities for growth, as reflected in the company's ROE of -7.68% and ROIC of -2.14%.

3. NewsRoom

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BGSF, Inc. (BGSF) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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BGSF, Inc. Reports Third Quarter 2025 Financial Results and Announced a Stock Buyback Plan

Nov -07

Source: accessnewswire.com

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BGSF, Inc. Delays Timing of Its Fiscal 2025 Third Quarter Results and Earnings Conference Call

Nov -06

Source: accessnewswire.com

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BGSF (NYSE:BGSF) Trading Down 2.2% – Here’s What Happened

Oct -23

Source: defenseworld.net

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BGSF, Inc. Announces Timing of Fiscal 2025 Third Quarter Results and Earnings Conference Call

Oct -21

Source: accessnewswire.com

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BGSF, Inc. Announces Additional Information Regarding Pending Special Cash Dividend of $2.00 Per Share

Sep -16

Source: accessnewswire.com

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BGSF, Inc. Announces Special Cash Dividend of $2.00 Per Share

Sep -11

Source: accessnewswire.com

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BGSF, Inc. Closes on Divestiture of Its Professional Division in $99 Million All-Cash Deal

Sep -08

Source: accessnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.29%)

6. Segments

Professional

Expected Growth: 8.23%

BGSF, Inc.'s 8.23% growth is driven by increasing demand for professional staffing services, particularly in the IT and healthcare sectors. The company's strategic acquisitions, expanded service offerings, and strong client relationships have also contributed to its growth. Additionally, the company's focus on providing specialized talent solutions has enabled it to capitalize on the growing trend of companies seeking flexible and skilled workforce solutions.

Property Management

Expected Growth: 8.37%

BGSF's Property Management segment growth of 8.37% is driven by increasing demand for outsourced real estate services, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on technology integration and process improvements has enhanced operational efficiency, leading to higher margins and revenue growth.

7. Detailed Products

Real Estate Services

BGSF, Inc. provides real estate services, including property management, leasing, and brokerage services to commercial and residential clients.

Facilities Management

BGSF offers facilities management services, including janitorial, landscaping, and maintenance services to commercial and industrial clients.

Construction Services

BGSF provides construction services, including general contracting, construction management, and design-build services for commercial and industrial projects.

Workforce Solutions

BGSF offers workforce solutions, including staffing, recruiting, and human resources services to commercial and industrial clients.

Project Management

BGSF provides project management services, including project planning, coordination, and execution for commercial and industrial projects.

8. BGSF, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for BGSF, Inc. is medium due to the availability of alternative staffing solutions and the ease of switching costs for clients.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of clients in the industry and their ability to negotiate prices and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the lack of differentiation in their products and services.

Threat Of New Entrants

The threat of new entrants is medium due to the moderate barriers to entry and the availability of resources and technology.

Intensity Of Rivalry

The intensity of rivalry is high due to the high level of competition in the industry and the need to differentiate and innovate to stay competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.63%
Debt Cost 11.16%
Equity Weight 55.37%
Equity Cost 12.51%
WACC 11.90%
Leverage 80.60%

11. Quality Control: BGSF, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Barrett Business Services

A-Score: 6.0/10

Value: 5.9

Growth: 5.6

Quality: 6.0

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Heidrick & Struggles

A-Score: 5.2/10

Value: 4.9

Growth: 4.1

Quality: 5.6

Yield: 3.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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Kforce

A-Score: 5.1/10

Value: 7.0

Growth: 4.4

Quality: 6.5

Yield: 7.0

Momentum: 0.0

Volatility: 5.3

1-Year Total Return ->

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Kelly Services

A-Score: 4.3/10

Value: 8.6

Growth: 2.0

Quality: 4.2

Yield: 4.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

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HireRight

A-Score: 4.1/10

Value: 6.4

Growth: 7.1

Quality: 3.4

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

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BGSF

A-Score: 4.0/10

Value: 8.1

Growth: 3.3

Quality: 3.0

Yield: 8.0

Momentum: 0.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.51$

Current Price

4.51$

Potential

-0.00%

Expected Cash-Flows