Andrew Steinerman, an analyst from J.P. Morgan, maintained the Buy rating on Bright Horizons. The associated price target remains the same with $156.00.
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Andrew Steinerman has given his Buy rating due to a combination of factors that highlight the growth potential and market position of Bright Horizons. The company’s Back-Up Care segment is significantly underutilized, with employees using only a small fraction of available services, suggesting a vast untapped market. This segment alone represents a substantial total addressable market in the U.S., estimated at $52 billion, with a large portion still unvended, providing ample opportunity for expansion.
Furthermore, Bright Horizons stands out as the sole provider with a comprehensive network of owned and operated centers, which positions it favorably to capture a higher share of the unvended market. Despite the current undervaluation of the stock, Steinerman anticipates that the company can sustain its historical revenue growth rates while improving margins. The potential for double-digit growth in the Back-Up segment and the recovery of Full-Service margins bolster confidence in the company’s future earnings, making the stock an attractive investment opportunity.