BRIGHT HORIZONS FAMILY SOLUT (BFAM)
US1091941005 - Common Stock
We assign a fundamental rating of 4 out of 10 to BFAM. BFAM was compared to 65 industry peers in the Diversified Consumer Services industry. There are concerns on the financial health of BFAM while its profitability can be described as average. While showing a medium growth rate, BFAM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year BFAM was profitable.
In the past year BFAM had a positive cash flow from operations.
BFAM had positive earnings in each of the past 5 years.
Each year in the past 5 years BFAM had a positive operating cash flow.
1.2 Ratios
BFAM's Return On Assets of 1.90% is fine compared to the rest of the industry. BFAM outperforms 68.75% of its industry peers.
BFAM's Return On Equity of 6.10% is fine compared to the rest of the industry. BFAM outperforms 68.75% of its industry peers.
With a decent Return On Invested Capital value of 3.70%, BFAM is doing good in the industry, outperforming 62.50% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for BFAM is significantly below the industry average of 14.93%.
The last Return On Invested Capital (3.70%) for BFAM is above the 3 year average (3.37%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 6.1% | ||
| ROIC | 3.7% |
ROA(3y)1.98%
ROA(5y)2.42%
ROE(3y)6.5%
ROE(5y)8.03%
ROIC(3y)3.37%
ROIC(5y)3.52%
1.3 Margins
The Profit Margin of BFAM (3.06%) is better than 65.63% of its industry peers.
In the last couple of years the Profit Margin of BFAM has declined.
BFAM has a better Operating Margin (7.08%) than 64.06% of its industry peers.
BFAM's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 21.99%, BFAM is not doing good in the industry: 82.81% of the companies in the same industry are doing better.
BFAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.08% | ||
| PM (TTM) | 3.06% | ||
| GM | 21.99% |
OM growth 3Y23.76%
OM growth 5Y-10.83%
PM growth 3Y19.92%
PM growth 5Y-18.08%
GM growth 3Y2.81%
GM growth 5Y-2.43%
2. Health
2.1 Basic Checks
BFAM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for BFAM has been increased compared to 1 year ago.
Compared to 5 years ago, BFAM has more shares outstanding
The debt/assets ratio for BFAM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.23 indicates that BFAM is not a great score, but indicates only limited risk for bankruptcy at the moment.
BFAM has a better Altman-Z score (2.23) than 65.63% of its industry peers.
BFAM has a debt to FCF ratio of 5.83. This is a neutral value as BFAM would need 5.83 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.83, BFAM is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
A Debt/Equity ratio of 0.78 indicates that BFAM is somewhat dependend on debt financing.
BFAM has a Debt to Equity ratio of 0.78. This is in the lower half of the industry: BFAM underperforms 70.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 5.83 | ||
| Altman-Z | 2.23 |
ROIC/WACC0.43
WACC8.63%
2.3 Liquidity
BFAM has a Current Ratio of 0.56. This is a bad value and indicates that BFAM is not financially healthy enough and could expect problems in meeting its short term obligations.
BFAM's Current ratio of 0.56 is on the low side compared to the rest of the industry. BFAM is outperformed by 85.94% of its industry peers.
A Quick Ratio of 0.56 indicates that BFAM may have some problems paying its short term obligations.
With a Quick ratio value of 0.56, BFAM is not doing good in the industry: 85.94% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.81% over the past year.
Measured over the past years, BFAM shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.48% on average per year.
Looking at the last year, BFAM shows a quite strong growth in Revenue. The Revenue has grown by 19.69% in the last year.
Measured over the past years, BFAM shows a small growth in Revenue. The Revenue has been growing by 4.91% on average per year.
EPS 1Y (TTM)8.81%
EPS 3Y22.1%
EPS 5Y-2.48%
EPS growth Q2Q7.79%
Revenue 1Y (TTM)19.69%
Revenue growth 3Y16.87%
Revenue growth 5Y4.91%
Revenue growth Q2Q16.27%
3.2 Future
Based on estimates for the next years, BFAM will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.45% on average per year.
The Revenue is expected to grow by 9.42% on average over the next years. This is quite good.
EPS Next Y10.77%
EPS Next 2Y19.08%
EPS Next 3Y18.45%
EPS Next 5YN/A
Revenue Next Year11.21%
Revenue Next 2Y9.98%
Revenue Next 3Y9.42%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 39.17, which means the current valuation is very expensive for BFAM.
BFAM's Price/Earnings is on the same level as the industry average.
BFAM's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.28.
BFAM is valuated quite expensively with a Price/Forward Earnings ratio of 35.36.
BFAM's Price/Forward Earnings ratio is in line with the industry average.
BFAM's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 20.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.17 | ||
| Fwd PE | 35.36 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as BFAM.
Based on the Price/Free Cash Flow ratio, BFAM is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.04 | ||
| EV/EBITDA | 24.45 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BFAM does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as BFAM's earnings are expected to grow with 18.45% in the coming years.
PEG (NY)3.64
PEG (5Y)N/A
EPS Next 2Y19.08%
EPS Next 3Y18.45%
5. Dividend
5.1 Amount
BFAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
BRIGHT HORIZONS FAMILY SOLUT
NYSE:BFAM (5/3/2024, 7:04:00 PM)
After market: 111.23 0 (0%)111.23
+6.96 (+6.67%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.45B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.17 | ||
| Fwd PE | 35.36 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.64
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 6.1% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7.08% | ||
| PM (TTM) | 3.06% | ||
| GM | 21.99% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)8.81%
EPS 3Y22.1%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.77%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)19.69%
Revenue growth 3Y16.87%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y