Bread Financial Holdings (BFH) AI Stock Analysis

• Market Cap: $3.56B
• Dividend Yield: 1.1%
• Average Volume (3M): 769.34K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.24
• Revenue Growth: -4.32%
• EPS Growth: 58.34%
• Country: US
• Employees: 6,000
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 4.02
• Shares Outstanding: 45,661,602
• 10 Day Avg. Volume: 952,631
• 30 Day Avg. Volume: 769,344
• PEG Ratio: -0.18
• Price to Book (P/B): 0.99
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 1.63
• Enterprise Value/Market Cap: 0.75
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 1.06
• Enterprise Value/Ebitda: 4.26
• 1Y Price Target: $71.73
• Price Target Upside: -7.74% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 13
• EPS Forecast (FY): 10.17
• Revenue Forecast (FY): $3.83B

• Rating: 72 Outperform
• Price Target: $82.00 ▲(5.47% Upside)

Bread Financial Holdings receives a solid score driven by strong earnings call highlights and favorable valuation metrics. The technical analysis supports a bullish outlook, although caution is advised due to potential overbought conditions. Financial performance shows stability but is tempered by high leverage and declining revenue growth.

Positive Factors

Strong Cash Flow Generation

Consistent cash flow generation supports operational stability and provides flexibility for strategic investments and debt management.

Strategic Partnerships

Expanding partnerships enhance market reach and revenue diversification, strengthening competitive positioning in the fintech sector.

Credit Ratings Upgrade

Improved credit rating reflects enhanced financial resilience and risk management, boosting stakeholder confidence and financial flexibility.

Negative Factors

High Leverage

Significant leverage can constrain financial flexibility and increase risk, potentially impacting long-term financial stability.

Declining Revenue Growth

Negative revenue growth indicates challenges in market expansion and product adoption, potentially affecting future profitability.

Elevated Net Loss Rates

Persistent high net loss rates can erode profit margins and signal underlying credit risk issues, affecting long-term financial health.

Bread Financial Holdings Business Overview & Revenue Model

Company Description

Bread Financial Holdings (BFH) is a financial services company that specializes in providing consumer finance solutions through a range of credit products and services. Operating primarily in the fintech sector, BFH offers innovative digital payment solutions, private label credit cards, and installment loans, catering to both consumers and merchants. The company focuses on enhancing customer experience and fostering financial inclusion by leveraging technology to streamline financing options for everyday purchases.

How the Company Makes Money

Bread Financial generates revenue primarily through interest income from its credit products, including installment loans and private label credit cards. The company earns interest from customers who carry balances on their accounts, as well as from various fees associated with credit services, such as late payment fees and transaction fees. Additionally, BFH collaborates with numerous retail partners to offer branded credit solutions, which not only drive customer loyalty but also contribute to the company's revenue through merchant fees. Strategic partnerships with retailers and e-commerce platforms enhance their market reach and enable cross-selling opportunities, further solidifying their revenue streams.

Bread Financial Holdings Financial Statement Overview

Summary

Bread Financial Holdings shows a stable financial position with strengths in cash flow generation and profit margins. However, challenges remain with declining revenue growth and high leverage, which could impact future financial flexibility. The company should focus on improving operational efficiency and reducing debt levels to enhance financial health.

Income Statement

Bread Financial Holdings shows a mixed performance in its income statement. The TTM data indicates a decline in revenue growth, with a negative growth rate of -0.72%. However, the company maintains a stable gross profit margin of approximately 52% and a net profit margin of 6.06%, which is commendable. The EBIT and EBITDA margins are relatively low at 8.14% and 9.96%, respectively, suggesting room for improvement in operational efficiency.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.34 in the TTM period, indicating significant leverage, which could pose financial risks. The return on equity is modest at 9.23%, showing moderate profitability relative to shareholder equity. The equity ratio stands at 14.51%, suggesting a lower proportion of equity financing compared to total assets, which could affect financial stability.

Cash Flow

Cash flow analysis reveals a positive trend with a free cash flow growth rate of 3.18% in the TTM period. The operating cash flow to net income ratio is 0.14, indicating that operating cash flow adequately covers net income. Additionally, the free cash flow to net income ratio is slightly above 1, demonstrating effective cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.68B	4.80B	5.17B	4.37B	3.65B	2.03B
Gross Profit	2.51B	2.44B	3.07B	2.28B	2.06B	2.03B
EBITDA	623.00M	471.00M	1.08B	413.00M	1.17B	0.00
Net Income	472.00M	277.00M	718.00M	223.00M	801.00M	214.00M
Balance Sheet
Total Assets	21.71B	22.89B	23.14B	25.41B	21.75B	22.55B
Cash, Cash Equivalents and Short-Term Investments	4.05B	3.85B	3.76B	3.99B	3.11B	3.02B
Total Debt	0.00	5.68B	5.44B	8.13B	7.57B	8.70B
Total Liabilities	18.40B	19.84B	20.22B	23.14B	19.66B	21.03B
Stockholders Equity	3.32B	3.05B	2.92B	2.27B	2.09B	1.52B
Cash Flow
Free Cash Flow	2.00B	1.86B	1.99B	1.78B	1.46B	1.83B
Operating Cash Flow	2.00B	1.86B	1.99B	1.85B	1.54B	1.88B
Investing Cash Flow	-1.22B	-1.17B	788.00M	-5.11B	-1.69B	1.77B
Financing Cash Flow	-476.00M	-592.00M	-3.09B	3.27B	608.00M	-4.17B

Bread Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 77.75
• 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 77.75 is above the 20-day moving average (MA) of 71.77, above the 50-day MA of 65.69, and above the 200-day MA of 57.64, indicating a bullish trend. The MACD of 3.50 indicates Negative momentum. The RSI at 84.26 is Negative, neither overbought nor oversold. The STOCH value of 93.64 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
SEZL	80 Outperform	$2.51B	23.29	107.03%	―	88.74%	106.14%
BFH	72 Outperform	$3.56B	7.94	14.81%	1.10%	-4.32%	58.34%
ENVA	71 Outperform	$4.06B	15.14	23.81%	―	21.10%	76.12%
LC	70 Outperform	$2.27B	22.44	7.40%	―	9.68%	94.85%
WU	69 Neutral	$3.04B	4.15	97.70%	10.10%	-2.51%	17.47%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LU	52 Neutral	$2.35B	-3.49	―	―	―	―

Bread Financial Holdings Corporate Events

Bread Financial Reports Improved November 2025 Performance

On December 10, 2025, Bread Financial Holdings reported a performance update for November 2025, highlighting a decrease in both net loss and delinquency rates compared to the previous year. The net loss rate decreased from 8.0% in November 2024 to 7.4% in November 2025, while the delinquency rate dropped from 6.2% to 6.0%, reflecting improved financial stability and operational resilience.

Bread Financial Holdings Issues New Preferred Stock Series

On November 25, 2025, Bread Financial Holdings, Inc. issued 3,000,000 depositary shares, each representing a 1/40th interest in its newly established 8.625% Non-Cumulative Perpetual Preferred Stock, Series A. This move, following an underwriting agreement with major financial institutions, aims to enhance the company’s financial structure by setting specific terms for dividends and stock transactions, potentially impacting its market position and shareholder value.

Bread Financial Announces Public Offering of Depositary Shares

On November 20, 2025, Bread Financial Holdings announced the pricing of an underwritten public offering of 3,000,000 depositary shares, each representing a 1/40th interest in a share of its 8.625% Non-Cumulative Perpetual Preferred Stock, Series A. The company expects to generate approximately $72.6 million in net proceeds from the offering, which will be used for general corporate purposes, potentially including contributions to its subsidiary, Comenity Capital Bank, and share repurchases. The offering is expected to close on November 25, 2025, subject to customary conditions, and the company plans to list the depositary shares on the New York Stock Exchange.

Bread Financial Launches Preferred Stock Offering

On November 20, 2025, Bread Financial Holdings announced the launch of a public offering of depositary shares, each representing a 1/40th interest in its Series A Preferred Stock. The company plans to use the proceeds for general corporate purposes, including potential contributions to its subsidiary, Comenity Capital Bank, and share repurchases. The offering is subject to market conditions, and the shares are expected to be listed on the New York Stock Exchange, with major financial institutions acting as joint bookrunners.

Bread Financial Reports Improved Financial Metrics Update

On November 13, 2025, Bread Financial Holdings, Inc. released a performance update for the period ending October 31, 2025. The update highlighted a slight decrease in the net loss rate and delinquency rate compared to the previous year, with the net principal losses and average credit card loans also showing a year-over-year decline. The company attributed the lower net loss rate in the fourth quarter of 2024 to a temporary freeze on delinquency progression due to hurricanes Helene and Milton.

Bread Financial Holdings Completes $500 Million Senior Notes Offering

On November 6, 2025, Bread Financial Holdings, Inc. completed its offering of $500 million in 6.750% Senior Notes due 2031, which are senior unsecured obligations. This financial move is significant as it strengthens the company’s capital structure and provides flexibility for future operations, potentially impacting its market positioning and stakeholder interests.

Bread Financial Announces $500M Senior Notes Offering

On October 28, 2025, Bread Financial Holdings announced the pricing of a $500 million private offering of 6.750% senior notes due 2031. The company plans to use the net proceeds of approximately $493 million, along with $275 million in cash, to redeem its outstanding 9.750% senior notes due 2029. This strategic financial move is expected to enhance Bread Financial’s debt structure and potentially improve its market position.

Bread Financial Announces $500M Senior Notes Offering

On October 28, 2025, Bread Financial Holdings announced a private offering of $500 million in senior notes, with the intention to use the proceeds, along with $275 million cash on hand, to redeem its outstanding 2029 Notes. This strategic move aims to manage the company’s debt obligations and is subject to market conditions, reflecting Bread Financial’s efforts to optimize its financial structure and maintain its competitive position in the financial services industry.

Bread Financial Reports Q3 2025 Performance Update

On October 23, 2025, Bread Financial Holdings reported a performance update for the period ending September 30, 2025, highlighting a net loss rate of 6.9% for September and 7.4% for the quarter. The company experienced a decrease in average credit card and other loans by 2% year-over-year for September and 1% for the quarter, with a delinquency rate improvement from 6.4% in 2024 to 6.0% in 2025, indicating a positive trend in managing loan delinquencies.

Bread Financial Announces Strong Q3 2025 Results

On October 23, 2025, Bread Financial Holdings announced its Q3 2025 financial results, highlighting a net income of $188 million and a tangible book value per share increase of 19% to $56.36. The company declared a quarterly cash dividend of $0.23 per share and increased its share repurchase authorization by $200 million. The company also received a credit ratings upgrade from Moody’s and signed new brand partnerships in the home vertical, enhancing its market presence. Despite macroeconomic uncertainties, Bread Financial remains confident in achieving its 2025 financial targets, supported by strong capital and cash flow generation.