Bread Financial Holdings (BFH) AI Stock Analysis

• Market Cap: $2.83B
• Dividend Yield: 1.4%
• Average Volume (3M): 566.20K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 1.31
• Revenue Growth: -4.15%
• EPS Growth: -38.33%
• Country: US
• Employees: 6,000
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 3.14
• Shares Outstanding: 46,642,430
• 10 Day Avg. Volume: 711,658
• 30 Day Avg. Volume: 566,203
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 1.27
• Enterprise Value/Ebitda: 6.50
• 1Y Price Target: $70.08
• Price Target Upside: 16.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 79 Outperform
• Price Target: $75.00 ▲(24.88% Upside)

Bread Financial Holdings demonstrates strong financial performance and positive technical indicators, supported by robust earnings call insights. While the valuation is reasonable, the company faces challenges in revenue and loan growth. Strategic initiatives and partnerships are key to future success.

Positive Factors

Partnership Extensions

Extending partnerships with major clients like Caesars Entertainment strengthens BFH's market position and ensures stable revenue streams, supporting long-term growth.

Strong Cash Flow Management

Efficient cash flow management enhances BFH's ability to invest in growth initiatives and return value to shareholders, ensuring financial stability.

Direct-to-Consumer Deposit Growth

Growth in consumer deposits reflects customer trust and strengthens BFH's liquidity, providing a solid foundation for future lending and investment activities.

Negative Factors

Revenue Decline

A decline in revenue indicates challenges in maintaining growth momentum, potentially impacting BFH's ability to fund strategic initiatives and sustain profitability.

Challenges with Loan Growth

Decreased loan growth can limit BFH's revenue potential and market expansion, necessitating strategic adjustments to attract and retain borrowers.

Rising Debt Levels

Moderate leverage levels require careful management to prevent financial strain, which could impact BFH's ability to invest in growth opportunities.

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

Bread Financial Holdings generates revenue through multiple streams primarily centered around interest income from consumer loans and transaction fees. The company issues credit cards and provides financing solutions, earning interest on outstanding balances. Additionally, BFH benefits from merchant partnerships, where it charges transaction fees for processing payments made through its financing options. The company may also generate income from late payment fees and other ancillary services related to credit management. Key partnerships with retail and e-commerce merchants allow BFH to expand its customer base and drive volume, contributing significantly to its overall earnings.

Bread Financial Holdings Financial Statement Overview

Summary

Bread Financial Holdings shows a strong recovery in revenue and operational efficiency, bolstered by significant debt reduction. The company maintains strong cash flow generation, which supports its financial health. However, the decline in net income and net profit margins poses concerns for profitability.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.80B	5.17B	4.37B	3.27B	3.30B
Gross Profit	2.44B	3.07B	2.28B	2.06B	1.95B
EBITDA	471.00M	1.08B	413.00M	1.17B	549.00M
Net Income	277.00M	718.00M	223.00M	801.00M	214.00M
Balance Sheet
Total Assets	22.89B	23.14B	25.41B	21.75B	22.55B
Cash, Cash Equivalents and Short-Term Investments	3.85B	3.59B	3.99B	3.11B	3.08B
Total Debt	5.68B	5.44B	8.13B	7.57B	8.82B
Total Liabilities	19.84B	20.22B	23.14B	19.66B	21.03B
Stockholders Equity	3.05B	2.92B	2.27B	2.09B	1.52B
Cash Flow
Free Cash Flow	1.86B	1.99B	1.78B	1.46B	1.83B
Operating Cash Flow	1.86B	1.99B	1.85B	1.54B	1.88B
Investing Cash Flow	-1.17B	788.00M	-5.11B	-1.69B	1.77B
Financing Cash Flow	-592.00M	-3.09B	3.27B	608.00M	-4.17B

Bread Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 60.06
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFH, the sentiment is Neutral. The current price of 60.06 is below the 20-day moving average (MA) of 63.95, below the 50-day MA of 62.14, and above the 200-day MA of 56.61, indicating a neutral trend. The MACD of -0.29 indicates Positive momentum. The RSI at 39.14 is Neutral, neither overbought nor oversold. The STOCH value of 5.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BFH.

Bread Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FINV	79 Outperform	1.91B	5.16	15.67%	3.67%	8.41%	34.76%
BFH	79 Outperform	$2.83B	10.28	9.19%	1.40%	-4.15%	-38.33%
ENVA	78 Outperform	3.05B	12.95	20.85%	―	23.42%	59.17%
LX	73 Outperform	927.13M	4.44	10.25%	5.52%	3.11%	95.40%
LC	67 Neutral	1.90B	25.81	3.83%	―	7.54%	70.26%
LU	52 Neutral	2.43B	-4.71	―	―	-38.81%	-425.73%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Bread Financial Holdings Corporate Events

Bread Financial Reports Improved August 2025 Performance

On September 9, 2025, Bread Financial Holdings, Inc. released a performance update for August 2025, highlighting a slight decrease in both net loss and delinquency rates compared to the same period in 2024. The net loss rate decreased from 7.8% to 7.6%, and the delinquency rate dropped from 6.2% to 5.8%, indicating improved financial health and potentially strengthening the company’s position in the competitive financial services market.

Bread Financial Announces $200M Stock Repurchase Plan

On August 27, 2025, Bread Financial Holdings announced that its Board of Directors has approved a plan to repurchase up to $200 million of its common stock. The initiative is part of the company’s strategy to strengthen its capital position and return value to shareholders, though the repurchase is subject to market conditions and regulatory approvals.

Bread Financial Announces Tender Offer Results

On August 22, 2025, Bread Financial Holdings announced the expiration and results of its cash tender offers for its 9.750% Senior Notes due 2029 and 8.375% Fixed-Rate Reset Subordinated Notes due 2035. The tender offers, which expired on August 21, 2025, involved a total of $150,000,000 in aggregate principal amount, with $31,288,000 of the 2029 Notes and $121,000 of the 2035 Notes tendered. The results of these offers reflect Bread Financial’s strategic financial management and may impact its debt profile and market positioning.

Bread Financial Reports Improved Financial Health in Update

On August 15, 2025, Bread Financial Holdings, Inc. released a performance update for the period ending July 31, 2025. The update highlighted a decrease in both net loss and delinquency rates compared to the previous year, with the net loss rate dropping from 8.0% to 7.6% and the delinquency rate falling from 6.2% to 5.8%. These improvements suggest a positive impact on the company’s financial health and may enhance its competitive positioning in the financial services industry.

Bread Financial Announces Early Tender Results for Notes

On August 7, 2025, Bread Financial Holdings announced the early tender results of its cash tender offer for its 9.750% Senior Notes due 2029 and 8.375% Fixed-Rate Reset Subordinated Notes due 2035. The company reported that $28,402,000 of the 2029 Notes and $121,000 of the 2035 Notes were tendered by the early participation date. The settlement for these notes is expected on August 11, 2025, with total consideration provided for valid tenders. This move is part of Bread Financial’s strategic financial management, potentially impacting its debt structure and market positioning.

Bread Financial Announces $150M Debt Repurchase Plan

On July 24, 2025, Bread Financial Holdings announced a cash tender offer to repurchase up to $150 million of its 9.750% Senior Notes due 2029 and 8.375% Fixed-Rate Reset Subordinated Notes due 2035. This strategic financial move aims to manage the company’s debt profile and potentially improve its financial stability. The tender offers, which include an early participation incentive, are set to expire on August 21, 2025, and are conducted through a modified Dutch Auction procedure, allowing note holders to specify their minimum acceptable bid prices.

Bread Financial Reports Strong Q2 2025 Results

On July 24, 2025, Bread Financial Holdings announced its second quarter 2025 financial results, reporting a net income of $139 million and a 7% increase in tangible book value per common share. The company declared a quarterly cash dividend of $0.21 per share, payable on September 12, 2025. Despite a slight decrease in average loans due to softer consumer spending, the company saw a 4% increase in credit sales year-over-year. Bread Financial completed a $150 million share repurchase program and a tender offer for senior notes, reflecting its commitment to operational excellence and shareholder value. The company also extended its partnership with Caesars Entertainment, launching a new rewards credit card. The outlook for 2025 anticipates stable consumer financial health, with expectations of flat to slightly down average loan growth and relatively flat total revenue compared to 2024.

Bread Financial Reports Q2 2025 Performance Update

On July 24, 2025, Bread Financial Holdings reported its performance update for the period ending June 30, 2025. The company experienced a slight year-over-year decrease in average credit card and other loans by 1%, with net principal losses amounting to $348 million and a net loss rate of 7.9%. The delinquency rate improved from 6.0% in 2024 to 5.7% in 2025. The impact of hurricanes Helene and Milton in 2024 led to a temporary freeze on delinquency progression, affecting the net principal losses and net loss rate in the second quarter of 2025.

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.