Bread Financial Holdings (BFH) AI Stock Analysis

• Market Cap: $2.79B
• Dividend Yield: 1.4%
• Average Volume (3M): 694.97K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 1.37
• Revenue Growth: -3.20%
• EPS Growth: -28.69%
• Country: US
• Employees: 6,000
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Credit Services
• EPS (TTM): 2.86
• Shares Outstanding: 46,549,180
• 10 Day Avg. Volume: 840,775
• 30 Day Avg. Volume: 694,969
• PEG Ratio: 5.27
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.38
• Enterprise Value/Market Cap: -0.61
• Enterprise Value/Revenue: -0.09
• Enterprise Value/Gross Profit: -0.69
• Enterprise Value/Ebitda: -0.78
• 1Y Price Target: $56.11
• Price Target Upside: -6.30% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: $66.00 ▲(10.22%Upside)

Bread Financial Holdings has a solid financial foundation with impressive revenue growth and debt reduction. Technical indicators show strong momentum, though valuation is average. Earnings call insights are positive but tempered by macroeconomic challenges and slight revenue declines.

Positive Factors

Credit Performance

Credit losses are trending better than expected and ahead of consensus estimates.

Credit Trends

Credit trends are improving, considered a bigger story than the current pressure on loan growth.

Economic Metrics

Bread Financial's execution in improving its economic metrics impresses, particularly against low expectations.

Negative Factors

Guidance

BFH lowered 2025 guidance slightly on growth, revenue, and operating leverage to reflect greater macro uncertainty.

Loan Growth

Loan growth remains weak, down 1.4% year-over-year, likely due to consumers pulling back from big-ticket purchases.

Share Repurchases

Incremental share repurchases are expected to be delayed given macro uncertainty and the company being at the lower end of its targeted capital range.

Bread Financial Holdings Business Overview & Revenue Model

Company Description

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for approximately 130 private label and co-brand credit card programs, as well as through Bread partnerships to approximately 500 small-and medium-sized businesses merchants; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs and Bread BNPL (installment loans, split-pay) products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products, including installment and split-pay solutions. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was founded in 1996 and is headquartered in Columbus, Ohio.

How the Company Makes Money

BFH primarily generates revenue through the provision of credit card services, which include interest income from outstanding credit balances and fees from cardholders, such as late fees and annual fees. The company also earns substantial income from its partnerships with retailers and other businesses, who use BFH's private label and co-branded credit card programs to enhance customer loyalty and spending. Additionally, BFH generates revenue through interchange fees, which are charged to merchants whenever customers use their credit cards to make purchases. The company's installment lending solutions also contribute to its earnings, providing customers with flexible payment options for larger purchases while generating interest income for BFH. Strategic partnerships with leading brands across various industries further bolster BFH's revenue streams by expanding its customer base and enhancing its service offerings.

Bread Financial Holdings Financial Statement Overview

Summary

Bread Financial Holdings displays strong revenue growth and operational efficiency, supported by significant debt reduction. However, declining net income impacts profitability margins. Strong cash flow generation supports financial health.

Income Statement

Bread Financial Holdings shows a positive revenue trend with revenue growing from $3.06 billion in 2023 to $5.02 billion in 2024, marking a significant rebound. The gross profit and EBIT margins are strong, indicating efficient operations. However, net income has decreased from $718 million in 2023 to $277 million in 2024, which impacts net profit margin adversely. EBIT margin remains solid at 5.55%, but net profit margin drops to 5.51% from 23.46% in 2023, suggesting declining profitability.

Balance Sheet

The company has improved its financial stability by reducing total debt from $5.44 billion in 2023 to zero in 2024, significantly improving the debt-to-equity ratio. Stockholders' equity has increased, reflecting a stronger equity position. However, equity ratio is low at 13.33% in 2024, and total assets have slightly decreased. The absence of debt is commendable and mitigates financial risk.

Cash Flow

Operating cash flow remains robust at $1.86 billion in 2024, with a slight decline from $1.99 billion in 2023. Free cash flow remains strong, supporting the company's liquidity. The company's ability to generate cash from operations is a positive indicator, with free cash flow to net income ratio at 6.71, highlighting a strong cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.75B	4.80B	5.17B	4.37B	3.27B	3.30B
Gross Profit	2.44B	2.44B	3.07B	2.28B	2.06B	1.95B
EBITDA	478.00M	471.00M	1.08B	413.00M	1.17B	549.00M
Net Income	280.00M	277.00M	718.00M	223.00M	801.00M	214.00M
Balance Sheet
Total Assets	22.38B	22.89B	23.14B	25.41B	21.75B	22.55B
Cash, Cash Equivalents and Short-Term Investments	4.21B	3.68B	3.59B	3.99B	3.11B	3.08B
Total Debt	0.00	5.68B	5.44B	8.13B	7.57B	8.82B
Total Liabilities	19.31B	19.84B	20.22B	23.14B	19.66B	21.03B
Stockholders Equity	3.07B	3.05B	2.92B	2.27B	2.09B	1.52B
Cash Flow
Free Cash Flow	1.82B	1.86B	1.99B	1.78B	1.46B	1.83B
Operating Cash Flow	1.80B	1.86B	1.99B	1.85B	1.54B	1.88B
Investing Cash Flow	-1.20B	-1.17B	788.00M	-5.11B	-1.69B	1.77B
Financing Cash Flow	-179.00M	-592.00M	-3.09B	3.27B	608.00M	-4.17B

Bread Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 59.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFH, the sentiment is Positive. The current price of 59.88 is above the 20-day moving average (MA) of 53.99, above the 50-day MA of 52.00, and above the 200-day MA of 53.99, indicating a bullish trend. The MACD of 1.87 indicates Negative momentum. The RSI at 72.13 is Negative, neither overbought nor oversold. The STOCH value of 94.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BFH.

Bread Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FINV	84 Outperform	$2.41B	6.93	17.91%	2.91%	5.13%	25.93%
ENVA	78 Outperform	$2.93B	13.60	19.94%	―	24.47%	54.18%
BFH	74 Outperform	$2.79B	10.68	9.34%	1.40%	-3.20%	-28.69%
LX	74 Outperform	$1.17B	6.59	12.60%	3.15%	7.53%	37.86%
LC	62 Neutral	$1.42B	28.00	3.86%	―	5.72%	31.82%
Sector *	61 Neutral	C$14.56B	6.16	20.17%	5.70%	26.93%	-38.21%
LU	52 Neutral	$2.41B	―	-3.79%	4.57%	-38.81%	-425.73%

Bread Financial Holdings Corporate Events

Bread Financial Reports May 2025 Performance Update

On June 11, 2025, Bread Financial Holdings, Inc. released a performance update for May 2025, highlighting a year-over-year decrease in average credit card and other loans by 1%, with net principal losses at $120 million and a net loss rate of 8.0%. The company noted that actions taken in response to hurricanes Helene and Milton in 2024, which included freezing delinquency progression for affected cardholders, resulted in lower net principal losses and net loss rates in the fourth quarter of 2024, but are expected to negatively impact these metrics in the second quarter of 2025.

The most recent analyst rating on (BFH) stock is a Hold with a $59.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Announces Early Tender Results for Notes

On June 5, 2025, Bread Financial Holdings announced the early tender results of its cash tender offer for its 9.750% Senior Notes due 2029. The company reported that approximately $536,786,000 in aggregate principal amount of the notes had been validly tendered by the early participation date, exceeding the $150,000,000 tender cap. As a result, no further notes will be accepted after the early participation date, and the settlement is anticipated to occur on June 9, 2025. This move is part of Bread Financial’s strategic financial management, potentially impacting its debt structure and financial obligations.

The most recent analyst rating on (BFH) stock is a Hold with a $52.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Announces $150M Tender Offer for Notes

On May 21, 2025, Bread Financial Holdings announced a cash tender offer to repurchase up to $150 million of its 9.750% Senior Notes due in 2029. This move is part of a modified Dutch Auction process, with specific deadlines for early participation and final payment. The tender offer aims to manage the company’s debt profile, potentially impacting its financial strategy and market positioning.

The most recent analyst rating on (BFH) stock is a Hold with a $59.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Holds Virtual Annual Stockholders Meeting

On May 13, 2025, Bread Financial Holdings, Inc. conducted its annual stockholders meeting virtually, with 88.69% of shares represented. Key outcomes included the election of directors, approval of executive compensation, and ratification of Deloitte & Touche LLP as the independent accounting firm for 2025, indicating continued shareholder support for the company’s governance and financial strategies.

The most recent analyst rating on (BFH) stock is a Hold with a $59.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Reports Improved April 2025 Performance

On May 13, 2025, Bread Financial Holdings released a performance update for April 2025, highlighting a decrease in net loss and delinquency rates compared to the previous year. The net loss rate dropped from 8.6% to 7.8%, and the delinquency rate decreased from 6.0% to 5.7%. These improvements are partly attributed to the temporary freeze on delinquency progression due to hurricanes in 2024, which had a delayed impact on losses and rates in 2025.

The most recent analyst rating on (BFH) stock is a Hold with a $59.00 price target. To see the full list of analyst forecasts on Bread Financial Holdings stock, see the BFH Stock Forecast page.

Bread Financial Reports Strong Q1 2025 Results

On April 24, 2025, Bread Financial Holdings announced its first quarter financial results, highlighting a net income of $138 million and a tangible book value per common share increase to $48.92. The company successfully executed a $400 million subordinated notes offering and completed a $150 million share repurchase program, enhancing its capital structure and shareholder value. Credit sales grew by 1% year-over-year, driven by increased consumer spending, while the company maintained a disciplined approach to credit risk management amid economic uncertainties. The announcement also included a declared quarterly cash dividend of $0.21 per share, payable on June 13, 2025.

Bread Financial Reports Q1 2025 Performance Update

On April 24, 2025, Bread Financial Holdings, Inc. released a performance update for the period ended March 31, 2025, highlighting a net loss rate of 8.2% and a delinquency rate of 5.9%. These figures indicate a slight improvement from the previous year, where the delinquency rate was 6.2%. The update reflects the company’s ongoing efforts to manage credit performance amidst challenging economic conditions, which could have implications for its market positioning and stakeholder confidence.