Bright Horizons (BFAM) AI Stock Analysis

• Market Cap: $4.01B
• Dividend Yield: N/A
• Average Volume (3M): 945.60K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.48
• Revenue Growth: 9.38%
• EPS Growth: 74.27%
• Country: US
• Employees: 32,050
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): 1.15
• Shares Outstanding: 56,553,944
• 10 Day Avg. Volume: 1,582,505
• 30 Day Avg. Volume: 945,597
• PEG Ratio: 0.75
• Price to Book (P/B): 4.31
• Price to Sales (P/S): 1.97
• P/FCF Ratio: 22.52
• Enterprise Value/Market Cap: 1.60
• Enterprise Value/Revenue: 2.19
• Enterprise Value/Gross Profit: 9.24
• Enterprise Value/Ebitda: 15.72
• 1Y Price Target: $95.57
• Price Target Upside: 32.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 5.1
• Revenue Forecast (FY): $3.12B

• Rating: 61 Neutral
• Price Target: $86.00 ▲(18.87% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

Improving fundamentals and a positive guidance tone support the score, led by stronger profitability and free cash flow trends. This is partially offset by balance-sheet leverage risk and a weak technical setup (below key moving averages with negative MACD), while valuation is only moderately supportive given a ~23.5 P/E and no dividend yield.

Positive Factors

High‑margin Backup Care

Backup care is a durable, growing, high-margin business line: management expects 11%–13% growth and long-run margins of 25%–30%. Strong penetration gains within existing clients and sub-10% overall penetration imply structural revenue and profit runway that can drive sustained margin mix improvement.

Improving Profitability

Multi-year margin expansion (operating profit and net income rising materially) reflects operating leverage from tuition/pricing, mix shifts to higher‑margin services and successful cost control. Sustained margin improvement supports cash generation and resilience against cyclical enrollment swings over the medium term.

Solid Free Cash Flow

Consistent, rising free cash flow provides durable financial optionality: it funds capex, strategic openings, and buybacks while enabling deleveraging if prioritized. FCF traction since 2022 indicates the underlying business converts earnings into real cash, bolstering long‑term balance sheet flexibility.

Negative Factors

Elevated Leverage

Higher leverage constrains strategic flexibility and increases vulnerability to rate or demand shocks. Coverage is modest (operating cash flow relative to debt under ~0.4) and net leverage near ~1.7x EBITDA, leaving less room for aggressive M&A or cushioning during slower enrollment periods without prioritizing debt paydown.

Portfolio Rationalization & Closures

Ongoing center closures are structural: removing low‑performing capacity improves long‑run profitability but creates persistent revenue headwinds, multi‑year lease/tail costs, and operational churn. The rationalization delays reported top‑line recovery and requires sustained execution to realize long‑term network quality gains.

Suboptimal Occupancy & Labor Pressure

Occupancy below target and material wage/benefit cost pressure compress margins and slow pricing leverage. With ~12% of centers under 40% occupancy and enrollment gains modest, labor and benefits inflation can persistently offset tuition increases and limit margin upside until occupancy and enrollment sustainably recover.

Bright Horizons Business Overview & Revenue Model

Company Description

Bright 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 Money

Bright 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 Financial Statement Overview

Summary

Income statement and cash flow trends are positive (strong multi-year revenue growth, expanding net margin to ~6.6% in 2025, and higher free cash flow), but the balance sheet tempers the picture due to higher 2025 leverage and weaker operating cash flow coverage versus total debt.

Income Statement

Revenue has grown strongly over the last several years, with 2025 up meaningfully versus 2024 (while 2020 showed a sharp decline). Profitability has improved steadily: operating profit and net income rose materially from 2023 to 2025, and net margin expanded from ~3.1% (2023) to ~6.6% (2025). Gross margin has been fairly stable in the low-to-mid 20% range, supporting consistent earnings leverage. The main weakness is that margins, while improving, are still moderate for the business and could be sensitive if costs rise or pricing weakens.

Balance Sheet

Leverage is the key constraint: total debt increased sharply in 2025 and debt remains high relative to equity (debt-to-equity rising to ~1.84 in 2025 from ~1.40 in 2024). Equity has grown, but not enough to offset the higher debt load, which raises financial risk and reduces flexibility. On the positive side, returns on equity have improved meaningfully (from low single-digits earlier in the period to ~14% in 2025), indicating better profitability on the capital base.

Cash Flow

Cash generation is solid and improving: operating cash flow increased in 2025 and free cash flow rose to ~$256M, with a strong step-up versus 2024. Free cash flow has generally tracked upward since 2022 (despite volatility earlier), and free cash flow remains a meaningful share of earnings (roughly three-quarters of net income in 2025). A watch item is that operating cash flow is not especially large relative to total debt (coverage ratio under ~0.4 in 2025), which limits deleveraging speed if management prioritizes debt reduction.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.93B	2.69B	2.42B	2.02B	1.76B
Gross Profit	691.05M	619.61M	531.72M	478.65M	415.01M
EBITDA	408.07M	344.54M	281.92M	257.81M	235.28M
Net Income	193.12M	140.19M	74.05M	80.64M	70.46M
Balance Sheet
Total Assets	3.89B	3.85B	3.90B	3.80B	3.64B
Cash, Cash Equivalents and Short-Term Investments	140.09M	122.03M	93.57M	53.92M	283.69M
Total Debt	2.46B	1.79B	1.86B	1.97B	1.78B
Total Liabilities	2.55B	2.57B	2.68B	2.72B	2.46B
Stockholders Equity	1.34B	1.28B	1.21B	1.08B	1.18B
Cash Flow
Free Cash Flow	256.36M	240.15M	165.12M	117.92M	163.76M
Operating Cash Flow	347.68M	337.46M	256.14M	188.47M	227.25M
Investing Cash Flow	-103.79M	-117.76M	-126.94M	-278.05M	-117.39M
Financing Cash Flow	-230.38M	-183.81M	-91.63M	-121.34M	-230.03M

Bright Horizons Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 72.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

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 72.35 is below the 20-day moving average (MA) of 83.93, below the 50-day MA of 93.71, and below the 200-day MA of 108.29, indicating a bearish trend. The MACD of -6.86 indicates Positive momentum. The RSI at 28.10 is Positive, neither overbought nor oversold. The STOCH value of 30.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BFAM.

Bright Horizons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTDR	72 Outperform	$4.12B	15.82	91.16%	―	11.88%	18.08%
HRB	63 Neutral	$4.02B	7.31	―	3.67%	4.15%	8.13%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BFAM	61 Neutral	$4.01B	21.18	14.75%	―	9.38%	74.27%
WW	47 Neutral	$215.42M	0.20	―	―	-9.32%	―
MED	43 Neutral	$117.72M	-6.25	-9.13%	―	-36.29%	-96.65%
EJH	40 Neutral	$45.63M	-0.01	-1.75%	―	-2.53%	99.45%

Bright Horizons Corporate Events

Bright Horizons Updates Executive Long-Term Incentive Compensation Plan

Bright Horizons Family Solutions Inc. is a major operator of early education and child care centers and a provider of back-up care and educational advisory services for working families and employers. Its model is closely tied to corporate workforce strategies, and by year-end 2025 it ran 1,010 centers with capacity to serve roughly 115,000 children, anchoring its position in employer-sponsored family care solutions.

For 2025, Bright Horizons reported revenue of $2.9 billion, up 9% from 2024, with income from operations growing 28% to $315 million and net income rising 38% to $193 million, while adjusted EBITDA increased 19% to $487 million, underscoring margin and earnings expansion. Fourth-quarter 2025 revenue grew 9% to $734 million, driven by higher back-up care utilization and center enrollment and pricing, but GAAP operating income fell 6% and net income dropped 25% due to $14.8 million of impairment and lease termination costs, even as non-GAAP operating and earnings measures posted double-digit gains.

On February 9, 2026, the board’s compensation committee overhauled the long-term incentive program to align more closely with market practices by doubling the performance-based component of executive equity awards to 50% and eliminating stock options starting in fiscal 2026. The committee also adopted a new RSU agreement form that accelerates vesting upon death or disability and raised 2026 target LTIP values for CEO Stephen Kramer and CFO Elizabeth Boland while granting COO Mandy Berman a one-time $500,000 RSU award tied to expanded duties, moves likely to sharpen pay-for-performance alignment and support executive retention during the company’s next growth phase.

The most recent analyst rating on (BFAM) stock is a Hold with a $101.00 price target. To see the full list of analyst forecasts on Bright Horizons stock, see the BFAM Stock Forecast page.