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Bright Horizons (BFAM)
NYSE:BFAM
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Bright Horizons
(NYSE:BFAM)
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Rating:67Neutral
Price Target:
$106.00
▲(10.15% Upside)
Bright Horizons' strong earnings call performance, with significant revenue and EPS growth, is the most impactful factor, contributing positively to the overall score. Financial performance shows stability with room for improvement, while technical analysis indicates a bearish trend. The valuation is moderate, with no dividend yield to enhance attractiveness.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust demand for services and effective business strategies, supporting long-term expansion and profitability.
Back-Up Care Segment Success
The success in the back-up care segment highlights a growing market need and positions the company to capitalize on this demand, enhancing revenue stability.
Positive Outlook for Full Year
An upgraded full-year outlook reflects management's confidence in sustained growth and operational execution, supporting long-term strategic goals.
Negative Factors
Moderate Enrollment Growth
Moderate enrollment growth may limit revenue potential and suggests challenges in attracting new clients, impacting future growth prospects.
Potential Impact from Client Layoffs
Client layoffs could reduce demand for services, affecting revenue and highlighting potential vulnerabilities in the business model.
Significant Debt Levels
High debt levels can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.
Bright Horizons (BFAM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.49B
Dividend YieldN/A
Average Volume (3M)731.06K
Price to Earnings (P/E)27.7
Beta (1Y)0.37
Revenue Growth9.38%
EPS Growth74.27%
CountryUS
Employees32,050
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)1.57
Shares Outstanding56,553,944
10 Day Avg. Volume755,500
30 Day Avg. Volume731,061
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)5.02
Price to Sales (P/S)2.39
P/FCF Ratio26.74
Enterprise Value/Market Cap1.43
Enterprise Value/Revenue2.73
Enterprise Value/Gross Profit11.29
Enterprise Value/Ebitda19.19
Forecast
1Y Price Target
$131.86Price Target Upside37.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Bright Horizons Business Overview & Revenue Model
Company DescriptionBright Horizons Family Solutions Inc. provides early education and child care, back-up care, educational advisory, and other workplace solutions services for employers and families. The company operates through three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory and Other Services. The Full Service Center-Based Child Care segment offers traditional center-based child care and early education, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, and self-sourced reimbursed care services through child care centers, school-age campuses, and in-home caregivers, as well as the back-up care network. The Educational Advisory and Other Services segment offers tuition assistance and student loan repayment program administration, workforce education, and related educational consulting services, as well as college admissions advisory services. As of December 31, 2021, it operated 1,014 child care and early education centers in the United States, Puerto Rico, the United Kingdom, Canada, the Netherlands, and India. The company was formerly known as Bright Horizons Solutions Corp. and changed its name to Bright Horizons Family Solutions Inc. in July 2012. Bright Horizons Family Solutions Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.
How the Company Makes MoneyBright Horizons generates revenue primarily through contracts with employers who sponsor child care and related services for their employees. The company charges fees for its child care centers, back-up care services, and other educational programs. Key revenue streams include monthly tuition fees from parents, corporate contracts for child care benefits, and fees for educational consulting services. Significant partnerships with corporations and institutions enhance its market position and contribute to its earnings by providing access to a large customer base seeking quality child care solutions.
Bright Horizons Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong revenue and EPS growth, driven by significant success in the back-up care segment. Positive developments in the U.K. business and upgraded full-year guidance further contribute to the optimistic sentiment. However, there are some concerns about moderate enrollment growth in full service and potential impacts from client layoffs.Q3-2025 Updates
Positive Updates
Strong Revenue and EPS Growth
Revenue increased 12% to $803 million, and adjusted EPS grew 41% to $1.57, both exceeding expectations.
Back-Up Care Segment Success
Back-up care revenue increased 26% to $253 million, driven by strong demand, especially during the peak summer season.
Positive Outlook for Full Year
Upgraded full-year earnings guidance with expected revenue of approximately $2.925 billion, representing 9% growth, and adjusted EPS in the range of $4.48 to $4.53.
U.K. Business Improvement
The U.K. full-service business is on track to contribute modestly positive earnings in 2025, showing continued enrollment growth and favorable government support.
Negative Updates
Moderate Enrollment Growth in Full Service
Enrollment in centers opened for more than 1 year increased at a low single-digit rate, with average occupancy ticking down to the mid-60s due to usual summer to fall seasonality.
Potential Impact from Client Layoffs
Concerns about the impact of headcount reductions at some client companies on service demand, though low penetration rates may offset this.
Company Guidance
During Bright Horizons Family Solutions' third-quarter earnings call, the company reported a 12% increase in revenue to $803 million and a 41% rise in adjusted EPS to $1.57, both surpassing expectations. The back-up care segment notably excelled, with revenue climbing 26% to $253 million, driven by demand from school-age programs. The full service centers saw a 6% revenue growth to $516 million, attributed to enrollment growth, tuition hikes, and new center openings. The education advisory segment grew by 10% to $34 million, led by College Coach and EdAssist. For the full year, Bright Horizons raised its revenue guidance to approximately $2.925 billion, reflecting a 9% growth, and increased its adjusted EPS outlook to a range of $4.48 to $4.53, indicating strong performance and strategic progress across its service lines.Bright Horizons Financial Statement Overview
Summary
Bright Horizons demonstrates solid revenue growth and improved profitability metrics, with a notable enhancement in leverage management. While the cash flow position shows some weaknesses, the overall financial health is stable with potential for further improvement in profitability and cash flow generation.Income Statement
Bright Horizons shows a consistent revenue growth trajectory with a 3% increase in the TTM period. The gross profit margin has improved to 24.2%, indicating efficient cost management. However, the net profit margin remains modest at 7%, suggesting room for profitability enhancement. The EBIT margin has slightly decreased, but the EBITDA margin remains stable, reflecting operational resilience.78
Positive
Balance Sheet
The company's debt-to-equity ratio has improved significantly to 0.58 in the TTM period, indicating better leverage management. Return on equity has increased to 24.3%, showcasing strong shareholder returns. The equity ratio suggests a stable financial structure, but the high historical leverage poses a potential risk if not managed carefully.72
Positive
Cash Flow
Free cash flow has decreased by 4.23% in the TTM period, which is a concern for liquidity. However, the operating cash flow to net income ratio remains healthy, indicating good cash generation relative to net income. The free cash flow to net income ratio is strong at 71.9%, suggesting efficient cash utilization.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.87B | 2.69B | 2.42B | 2.02B | 1.76B | 1.52B |
| Gross Profit | 694.39M | 619.61M | 531.72M | 478.65M | 415.01M | 304.55M |
| EBITDA | 408.37M | 344.54M | 281.92M | 257.81M | 235.28M | 165.00M |
| Net Income | 200.50M | 140.19M | 74.05M | 80.64M | 70.46M | 26.99M |
Balance Sheet | ||||||
| Total Assets | 3.88B | 3.85B | 3.90B | 3.80B | 3.64B | 3.73B |
| Cash, Cash Equivalents and Short-Term Investments | 116.60M | 122.03M | 93.57M | 53.92M | 283.69M | 405.84M |
| Total Debt | 1.75B | 1.79B | 1.86B | 1.97B | 1.78B | 1.85B |
| Total Liabilities | 2.46B | 2.57B | 2.68B | 2.72B | 2.46B | 2.44B |
| Stockholders Equity | 1.43B | 1.28B | 1.21B | 1.08B | 1.18B | 1.28B |
Cash Flow | ||||||
| Free Cash Flow | 232.48M | 240.15M | 165.12M | 117.92M | 163.76M | 124.83M |
| Operating Cash Flow | 323.44M | 337.46M | 256.14M | 188.47M | 227.25M | 209.57M |
| Investing Cash Flow | -88.59M | -117.76M | -126.94M | -278.05M | -117.39M | -83.83M |
| Financing Cash Flow | -230.83M | -183.81M | -91.63M | -121.34M | -230.03M | 229.00M |
Bright Horizons Technical Analysis
Negative
96.23
Price Trends
100.83
Negative
103.79
Negative
112.24
Negative
Market Momentum
-0.93
Positive
36.76
Neutral
10.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFAM, the sentiment is Negative. The current price of 96.23 is below the 20-day moving average (MA) of 100.91, below the 50-day MA of 100.83, and below the 200-day MA of 112.24, indicating a bearish trend. The MACD of -0.93 indicates Positive momentum. The RSI at 36.76 is Neutral, neither overbought nor oversold. The STOCH value of 10.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BFAM.
Bright Horizons Risk Analysis
Bright Horizons disclosed 28 risk factors in its most recent earnings report. Bright Horizons reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bright Horizons Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $4.38B | 17.01 | 91.16% | ― | 11.88% | 18.08% | |
67 Neutral | $5.49B | 27.71 | 14.19% | ― | 9.38% | 74.27% | |
63 Neutral | $5.40B | 9.58 | ― | 3.67% | 4.15% | 8.13% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
47 Neutral | $130.03M | 565.55 | 0.12% | ― | -36.29% | -96.65% | |
46 Neutral | $236.79M | 0.21 | ― | ― | -9.32% | ― | |
40 Neutral | $64.00M | -0.02 | -1.75% | ― | -2.53% | 99.45% |
* Consumer Cyclical Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.