Bright Horizons (BFAM) AI Stock Analysis

• Market Cap: $6.96B
• Dividend Yield: N/A
• Average Volume (3M): 639.63K
• Price to Earnings (P/E): 40.3
• Beta (1Y): 0.61
• Revenue Growth: 9.25%
• EPS Growth: 74.86%
• Country: US
• Employees: 32,050
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Personal Products & Services
• EPS (TTM): 1.07
• Shares Outstanding: 56,871,853
• 10 Day Avg. Volume: 602,833
• 30 Day Avg. Volume: 639,628
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 3.11
• Enterprise Value/Gross Profit: 13.14
• Enterprise Value/Ebitda: 23.11
• 1Y Price Target: $140.33
• Price Target Upside: 13.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: $135.00 ▲(9.46% Upside)

Bright Horizons Family Solutions exhibits strong financial performance and positive earnings call outcomes, supported by strategic corporate events. While technical indicators show a positive trend, the high P/E ratio suggests overvaluation, slightly tempering the overall score.

Positive Factors

Debt Management

BFAM paid down $49.5M in debt and repurchased ~$20M in stock.

Earnings

Outsized margins led to double-digit EPS beat.

Financial Performance

Adj EBITDA margins beat MSe/Cons by 90/140bps leading to a 1Q beat.

Negative Factors

Enrollment

Enrollment is plateauing due to structural changes like hybrid work and universal pre-k, along with pricing fatigue from parents.

Growth Expectations

Organic growth is expected to slow down due to plateauing enrollment trends and price pressures.

Operating Margins

Operating margins are expected to remain pressured below pre-COVID levels in the medium term.

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 through several key streams. The primary source of income comes from tuition fees charged for child care and early education services provided at their centers. The company also earns revenue through employer-sponsored child care programs, where organizations partner with Bright Horizons to offer subsidized child care options to their employees. Additionally, the company provides back-up care services for families needing temporary child care, contributing further to its earnings. Strategic partnerships with corporations and educational institutions enhance its revenue model by expanding its client base and service offerings, while also leveraging contracts with employers to provide comprehensive family care solutions.

Bright Horizons Financial Statement Overview

Summary

Bright Horizons demonstrates strong financial health with robust revenue growth, effective equity utilization, and solid cash flow management. However, operational efficiencies could be improved, and debt levels remain a concern.

Income Statement

Bright Horizons has demonstrated a robust revenue growth trajectory, with a notable increase from previous years. The TTM Gross Profit Margin is 23.67%, and the Net Profit Margin is 8.82%, both showing healthy profitability. Revenue growth is strong at 3.88% from the previous year, reflecting resilience and market demand. The EBIT Margin at 10.25% and EBITDA Margin at 10.40% indicate efficient operations, although there is room for improvement in operational efficiencies.

Balance Sheet

The company's Debt-to-Equity Ratio has improved, currently at 0.61, indicating a stable capital structure. Return on Equity (ROE) is 17.59%, suggesting effective utilization of equity capital. The Equity Ratio is 35.69%, showing a balanced asset financing strategy. However, the company maintains a significant level of debt, which could pose a risk in less favorable market conditions.

Cash Flow

Bright Horizons exhibits strong cash flow management with a Free Cash Flow growth of 1.08% TTM. The Operating Cash Flow to Net Income Ratio is 1.35, indicating robust cash generation relative to net income. The Free Cash Flow to Net Income Ratio stands at 0.99, suggesting efficient conversion of net income to free cash flow. These metrics highlight solid liquidity and financial health, providing flexibility for future investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.79B	2.69B	2.42B	2.02B	1.76B	1.52B
Gross Profit	660.35M	619.61M	484.81M	405.91M	364.11M	227.65M
EBITDA	375.38M	344.54M	281.92M	265.27M	235.28M	160.41M
Net Income	176.85M	140.19M	74.05M	80.64M	70.46M	26.99M
Balance Sheet
Total Assets	3.92B	3.85B	3.90B	3.80B	3.64B	3.73B
Cash, Cash Equivalents and Short-Term Investments	179.22M	122.03M	93.57M	36.22M	287.99M	405.84M
Total Debt	852.45M	1.79B	1.86B	1.97B	1.78B	1.85B
Total Liabilities	2.52B	2.57B	2.68B	2.72B	2.46B	2.44B
Stockholders Equity	1.40B	1.28B	1.21B	1.08B	1.18B	1.28B
Cash Flow
Free Cash Flow	242.75M	240.15M	165.12M	117.92M	163.76M	124.83M
Operating Cash Flow	332.09M	337.46M	256.14M	188.47M	227.25M	209.57M
Investing Cash Flow	-91.60M	-117.76M	-126.94M	-278.05M	-117.39M	-83.83M
Financing Cash Flow	-193.14M	-183.81M	-91.63M	-121.34M	-230.03M	229.00M

Bright Horizons Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 123.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFAM, the sentiment is Positive. The current price of 123.33 is above the 20-day moving average (MA) of 119.06, above the 50-day MA of 118.89, and above the 200-day MA of 119.66, indicating a bullish trend. The MACD of 1.20 indicates Negative momentum. The RSI at 59.02 is Neutral, neither overbought nor oversold. The STOCH value of 80.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BFAM.

Bright Horizons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SCI	78 Outperform	$11.45B	22.17	34.52%	1.53%	2.65%	7.42%
BFAM	77 Outperform	$6.96B	40.30	13.19%	―	9.25%	74.86%
CSV	64 Neutral	$719.15M	13.76	24.38%	0.99%	3.55%	73.06%
Sector *	61 Neutral	$17.16B	12.39	-5.32%	3.05%	1.51%	-15.30%

Bright Horizons Corporate Events

Bright Horizons Secures New $450M Loan Facility

On August 21, 2025, Bright Horizons Family Solutions LLC amended its existing credit agreement to establish a new $450 million term ‘B’ loan facility, which refinances previous loans. This financial restructuring aims to optimize the company’s debt profile, with the new loan maturing in 2032, potentially enhancing Bright Horizons’ financial stability and operational flexibility.

Bright Horizons Announces New Share Repurchase Program

On June 3, 2025, Bright Horizons held its annual shareholder meeting, where all director nominees were elected, the 2024 executive compensation was approved, and Deloitte & Touche LLP was ratified as the independent accounting firm for 2025. Additionally, the Board authorized a new $500 million share repurchase program, replacing the previous $400 million authorization, allowing the company to buy back shares at management’s discretion without an expiration date.