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BRIGHT HORIZONS FAMILY SOLUT (BFAM) Stock Fundamental Analysis

NYSE:BFAM - New York Stock Exchange, Inc. - US1091941005 - Common Stock

117.54  -0.13 (-0.11%)

After market: 117.54 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to BFAM. BFAM was compared to 71 industry peers in the Diversified Consumer Services industry. BFAM has a medium profitability rating, but doesn't score so well on its financial health evaluation. BFAM is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

BFAM had positive earnings in the past year.
BFAM had a positive operating cash flow in the past year.
In the past 5 years BFAM has always been profitable.
In the past 5 years BFAM always reported a positive cash flow from operatings.
BFAM Yearly Net Income VS EBIT VS OCF VS FCFBFAM Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M

1.2 Ratios

BFAM's Return On Assets of 2.98% is fine compared to the rest of the industry. BFAM outperforms 65.08% of its industry peers.
BFAM has a Return On Equity of 8.33%. This is in the better half of the industry: BFAM outperforms 60.32% of its industry peers.
With a decent Return On Invested Capital value of 4.67%, BFAM is doing good in the industry, outperforming 61.90% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for BFAM is significantly below the industry average of 11.87%.
The last Return On Invested Capital (4.67%) for BFAM is above the 3 year average (3.37%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 2.98%
ROE 8.33%
ROIC 4.67%
ROA(3y)1.98%
ROA(5y)2.42%
ROE(3y)6.5%
ROE(5y)8.03%
ROIC(3y)3.37%
ROIC(5y)3.52%
BFAM Yearly ROA, ROE, ROICBFAM Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20

1.3 Margins

The Profit Margin of BFAM (4.44%) is better than 60.32% of its industry peers.
In the last couple of years the Profit Margin of BFAM has declined.
Looking at the Operating Margin, with a value of 8.63%, BFAM is in the better half of the industry, outperforming 63.49% of the companies in the same industry.
In the last couple of years the Operating Margin of BFAM has declined.
BFAM's Gross Margin of 22.64% is on the low side compared to the rest of the industry. BFAM is outperformed by 85.71% of its industry peers.
BFAM's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 8.63%
PM (TTM) 4.44%
GM 22.64%
OM growth 3Y23.76%
OM growth 5Y-10.83%
PM growth 3Y19.92%
PM growth 5Y-18.08%
GM growth 3Y2.81%
GM growth 5Y-2.43%
BFAM Yearly Profit, Operating, Gross MarginsBFAM Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

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3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so BFAM is destroying value.
The number of shares outstanding for BFAM has been increased compared to 1 year ago.
Compared to 5 years ago, BFAM has more shares outstanding
BFAM has a better debt/assets ratio than last year.
BFAM Yearly Shares OutstandingBFAM Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M
BFAM Yearly Total Debt VS Total AssetsBFAM Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

2.2 Solvency

An Altman-Z score of 2.68 indicates that BFAM is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.68, BFAM is doing good in the industry, outperforming 66.67% of the companies in the same industry.
The Debt to FCF ratio of BFAM is 4.40, which is a neutral value as it means it would take BFAM, 4.40 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of BFAM (4.40) is better than 63.49% of its industry peers.
BFAM has a Debt/Equity ratio of 0.66. This is a neutral value indicating BFAM is somewhat dependend on debt financing.
BFAM has a worse Debt to Equity ratio (0.66) than 68.25% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.66
Debt/FCF 4.4
Altman-Z 2.68
ROIC/WACC0.39
WACC11.85%
BFAM Yearly LT Debt VS Equity VS FCFBFAM Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

2.3 Liquidity

BFAM has a Current Ratio of 0.61. This is a bad value and indicates that BFAM is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.61, BFAM is not doing good in the industry: 80.95% of the companies in the same industry are doing better.
BFAM has a Quick Ratio of 0.61. This is a bad value and indicates that BFAM is not financially healthy enough and could expect problems in meeting its short term obligations.
BFAM's Quick ratio of 0.61 is on the low side compared to the rest of the industry. BFAM is outperformed by 77.78% of its industry peers.
Industry RankSector Rank
Current Ratio 0.61
Quick Ratio 0.61
BFAM Yearly Current Assets VS Current LiabilitesBFAM Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M

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6

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 19.78% over the past year.
BFAM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.48% yearly.
Looking at the last year, BFAM shows a quite strong growth in Revenue. The Revenue has grown by 12.67% in the last year.
The Revenue has been growing slightly by 4.91% on average over the past years.
EPS 1Y (TTM)19.78%
EPS 3Y22.1%
EPS 5Y-2.48%
EPS Q2Q%26.14%
Revenue 1Y (TTM)12.67%
Revenue growth 3Y16.87%
Revenue growth 5Y4.91%
Sales Q2Q%11.35%

3.2 Future

The Earnings Per Share is expected to grow by 19.62% on average over the next years. This is quite good.
Based on estimates for the next years, BFAM will show a quite strong growth in Revenue. The Revenue will grow by 9.38% on average per year.
EPS Next Y22.15%
EPS Next 2Y20.36%
EPS Next 3Y19.62%
EPS Next 5YN/A
Revenue Next Year12.03%
Revenue Next 2Y9.96%
Revenue Next 3Y9.38%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
BFAM Yearly Revenue VS EstimatesBFAM Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1B 2B 3B
BFAM Yearly EPS VS EstimatesBFAM Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4

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3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 35.30, BFAM can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as BFAM.
BFAM is valuated rather expensively when we compare the Price/Earnings ratio to 27.96, which is the current average of the S&P500 Index.
BFAM is valuated quite expensively with a Price/Forward Earnings ratio of 28.57.
BFAM's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 24.11. BFAM is around the same levels.
Industry RankSector Rank
PE 35.3
Fwd PE 28.57
BFAM Price Earnings VS Forward Price EarningsBFAM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

BFAM's Enterprise Value to EBITDA ratio is in line with the industry average.
BFAM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. BFAM is cheaper than 60.32% of the companies in the same industry.
Industry RankSector Rank
P/FCF 31.63
EV/EBITDA 23.28
BFAM Per share dataBFAM EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10 20 30 40

4.3 Compensation for Growth

BFAM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
BFAM's earnings are expected to grow with 19.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.59
PEG (5Y)N/A
EPS Next 2Y20.36%
EPS Next 3Y19.62%

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0

5. Dividend

5.1 Amount

BFAM does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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BRIGHT HORIZONS FAMILY SOLUT

NYSE:BFAM (1/17/2025, 8:04:00 PM)

After market: 117.54 0 (0%)

117.54

-0.13 (-0.11%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)11-04 2024-11-04/amc
Earnings (Next)02-11 2025-02-11/amc
Inst Owners106.36%
Inst Owner Change-0.07%
Ins Owners1.06%
Ins Owner Change-6.28%
Market Cap6.84B
Analysts77.65
Price Target141.23 (20.15%)
Short Float %1.56%
Short Ratio1.39
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.32%
Min EPS beat(2)2.44%
Max EPS beat(2)18.2%
EPS beat(4)4
Avg EPS beat(4)10.19%
Min EPS beat(4)2.44%
Max EPS beat(4)18.2%
EPS beat(8)7
Avg EPS beat(8)9.22%
EPS beat(12)10
Avg EPS beat(12)7.21%
EPS beat(16)13
Avg EPS beat(16)29.19%
Revenue beat(2)0
Avg Revenue beat(2)-1.18%
Min Revenue beat(2)-1.32%
Max Revenue beat(2)-1.04%
Revenue beat(4)1
Avg Revenue beat(4)-0.37%
Min Revenue beat(4)-1.32%
Max Revenue beat(4)1.74%
Revenue beat(8)4
Avg Revenue beat(8)0.4%
Revenue beat(12)5
Avg Revenue beat(12)-0.77%
Revenue beat(16)6
Avg Revenue beat(16)-0.68%
PT rev (1m)-2.29%
PT rev (3m)3.16%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.79%
EPS NY rev (1m)0.03%
EPS NY rev (3m)1.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.1%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.07%
Valuation
Industry RankSector Rank
PE 35.3
Fwd PE 28.57
P/S 2.6
P/FCF 31.63
P/OCF 21.92
P/B 4.89
P/tB N/A
EV/EBITDA 23.28
EPS(TTM)3.33
EY2.83%
EPS(NY)4.11
Fwd EY3.5%
FCF(TTM)3.72
FCFY3.16%
OCF(TTM)5.36
OCFY4.56%
SpS45.16
BVpS24.05
TBVpS-10.86
PEG (NY)1.59
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 2.98%
ROE 8.33%
ROCE 6.98%
ROIC 4.67%
ROICexc 4.84%
ROICexgc 13.71%
OM 8.63%
PM (TTM) 4.44%
GM 22.64%
FCFM 8.23%
ROA(3y)1.98%
ROA(5y)2.42%
ROE(3y)6.5%
ROE(5y)8.03%
ROIC(3y)3.37%
ROIC(5y)3.52%
ROICexc(3y)3.53%
ROICexc(5y)3.67%
ROICexgc(3y)10.13%
ROICexgc(5y)10.07%
ROCE(3y)5.08%
ROCE(5y)5.29%
ROICexcg growth 3Y49.51%
ROICexcg growth 5Y-19.48%
ROICexc growth 3Y41.49%
ROICexc growth 5Y-12.56%
OM growth 3Y23.76%
OM growth 5Y-10.83%
PM growth 3Y19.92%
PM growth 5Y-18.08%
GM growth 3Y2.81%
GM growth 5Y-2.43%
F-Score8
Asset Turnover0.67
Health
Industry RankSector Rank
Debt/Equity 0.66
Debt/FCF 4.4
Debt/EBITDA 2.8
Cap/Depr 92.46%
Cap/Sales 3.65%
Interest Coverage 2.97
Cash Conversion 94.47%
Profit Quality 185.43%
Current Ratio 0.61
Quick Ratio 0.61
Altman-Z 2.68
F-Score8
WACC11.85%
ROIC/WACC0.39
Cap/Depr(3y)69.05%
Cap/Depr(5y)77.24%
Cap/Sales(3y)3.63%
Cap/Sales(5y)4.38%
Profit Quality(3y)201.05%
Profit Quality(5y)237.73%
High Growth Momentum
Growth
EPS 1Y (TTM)19.78%
EPS 3Y22.1%
EPS 5Y-2.48%
EPS Q2Q%26.14%
EPS Next Y22.15%
EPS Next 2Y20.36%
EPS Next 3Y19.62%
EPS Next 5YN/A
Revenue 1Y (TTM)12.67%
Revenue growth 3Y16.87%
Revenue growth 5Y4.91%
Sales Q2Q%11.35%
Revenue Next Year12.03%
Revenue Next 2Y9.96%
Revenue Next 3Y9.38%
Revenue Next 5YN/A
EBIT growth 1Y24.18%
EBIT growth 3Y44.63%
EBIT growth 5Y-6.46%
EBIT Next Year85.55%
EBIT Next 3Y34.32%
EBIT Next 5YN/A
FCF growth 1Y98.69%
FCF growth 3Y9.75%
FCF growth 5Y-3.97%
OCF growth 1Y80.22%
OCF growth 3Y6.91%
OCF growth 5Y-2.77%