BRIGHT HORIZONS FAMILY SOLUT (BFAM) Stock Fundamental Analysis
NYSE:BFAM - New York Stock Exchange, Inc. - US1091941005 - Common Stock - Currency: USD
BFAM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 72 industry peers in the Diversified Consumer Services industry. BFAM has an average financial health and profitability rating. BFAM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
BFAM had positive earnings in the past year.
BFAM had a positive operating cash flow in the past year.
In the past 5 years BFAM has always been profitable.
Each year in the past 5 years BFAM had a positive operating cash flow.
1.2 Ratios
The Return On Assets of BFAM (4.22%) is better than 66.67% of its industry peers.
The Return On Equity of BFAM (12.18%) is better than 72.22% of its industry peers.
BFAM has a Return On Invested Capital of 5.80%. This is in the better half of the industry: BFAM outperforms 69.44% of its industry peers.
BFAM had an Average Return On Invested Capital over the past 3 years of 4.20%. This is significantly below the industry average of 10.64%.
The last Return On Invested Capital (5.80%) for BFAM is above the 3 year average (4.20%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 12.18% | ||
| ROIC | 5.8% |
ROA(3y)2.55%
ROA(5y)2.06%
ROE(3y)8.17%
ROE(5y)6.51%
ROIC(3y)4.2%
ROIC(5y)3.33%
1.3 Margins
BFAM has a Profit Margin of 5.91%. This is in the better half of the industry: BFAM outperforms 63.89% of its industry peers.
In the last couple of years the Profit Margin of BFAM has declined.
The Operating Margin of BFAM (9.86%) is better than 69.44% of its industry peers.
In the last couple of years the Operating Margin of BFAM has declined.
BFAM has a worse Gross Margin (23.46%) than 77.78% of its industry peers.
BFAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.86% | ||
| PM (TTM) | 5.91% | ||
| GM | 23.46% |
OM growth 3Y8.14%
OM growth 5Y-6.38%
PM growth 3Y9.28%
PM growth 5Y-9.82%
GM growth 3Y-0.82%
GM growth 5Y-1.88%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), BFAM is destroying value.
The number of shares outstanding for BFAM has been reduced compared to 1 year ago.
Compared to 5 years ago, BFAM has less shares outstanding
BFAM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.72 indicates that BFAM is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.72, BFAM is doing good in the industry, outperforming 65.28% of the companies in the same industry.
The Debt to FCF ratio of BFAM is 4.19, which is a neutral value as it means it would take BFAM, 4.19 years of fcf income to pay off all of its debts.
BFAM's Debt to FCF ratio of 4.19 is fine compared to the rest of the industry. BFAM outperforms 72.22% of its industry peers.
BFAM has a Debt/Equity ratio of 0.66. This is a neutral value indicating BFAM is somewhat dependend on debt financing.
BFAM has a worse Debt to Equity ratio (0.66) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 4.19 | ||
| Altman-Z | 2.72 |
ROIC/WACC0.68
WACC8.58%
2.3 Liquidity
A Current Ratio of 0.60 indicates that BFAM may have some problems paying its short term obligations.
The Current ratio of BFAM (0.60) is worse than 72.22% of its industry peers.
BFAM has a Quick Ratio of 0.60. 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 Quick ratio of 0.60 is on the low side compared to the rest of the industry. BFAM is outperformed by 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
BFAM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 30.77%, which is quite impressive.
Measured over the past years, BFAM shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.06% on average per year.
Looking at the last year, BFAM shows a quite strong growth in Revenue. The Revenue has grown by 9.71% in the last year.
The Revenue has been growing slightly by 5.43% on average over the past years.
EPS 1Y (TTM)30.77%
EPS 3Y20.08%
EPS 5Y-1.06%
EPS Q2Q%50.98%
Revenue 1Y (TTM)9.71%
Revenue growth 3Y15.24%
Revenue growth 5Y5.43%
Sales Q2Q%6.88%
3.2 Future
The Earnings Per Share is expected to grow by 17.57% on average over the next years. This is quite good.
Based on estimates for the next years, BFAM will show a small growth in Revenue. The Revenue will grow by 7.55% on average per year.
EPS Next Y20.6%
EPS Next 2Y18.49%
EPS Next 3Y17.57%
EPS Next 5YN/A
Revenue Next Year7.71%
Revenue Next 2Y7.36%
Revenue Next 3Y7.55%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
BFAM is valuated quite expensively with a Price/Earnings ratio of 30.50.
Compared to the rest of the industry, the Price/Earnings ratio of BFAM is on the same level as its industry peers.
BFAM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.46.
BFAM is valuated rather expensively with a Price/Forward Earnings ratio of 23.35.
BFAM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BFAM is cheaper than 62.50% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BFAM to the average of the S&P500 Index (36.44), we can say BFAM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.5 | ||
| Fwd PE | 23.35 |
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 65.28% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.49 | ||
| EV/EBITDA | 20.26 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as BFAM's earnings are expected to grow with 17.57% in the coming years.
PEG (NY)1.48
PEG (5Y)N/A
EPS Next 2Y18.49%
EPS Next 3Y17.57%
5. Dividend
5.1 Amount
BFAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
114.07
-0.81 (-0.71%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners105.05%
Inst Owner Change-0.03%
Ins Owners1.04%
Ins Owner Change-0.22%
Market Cap6.53B
Analysts75
Price Target140.48 (23.15%)
Short Float %1.6%
Short Ratio1.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.56%
Min EPS beat(2)5.96%
Max EPS beat(2)17.16%
EPS beat(4)4
Avg EPS beat(4)10.94%
Min EPS beat(4)2.44%
Max EPS beat(4)18.2%
EPS beat(8)8
Avg EPS beat(8)9.31%
EPS beat(12)10
Avg EPS beat(12)8.15%
EPS beat(16)13
Avg EPS beat(16)9.19%
Revenue beat(2)0
Avg Revenue beat(2)-1.82%
Min Revenue beat(2)-1.98%
Max Revenue beat(2)-1.66%
Revenue beat(4)0
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-1.98%
Max Revenue beat(4)-1.04%
Revenue beat(8)3
Avg Revenue beat(8)-0.2%
Revenue beat(12)5
Avg Revenue beat(12)-0.33%
Revenue beat(16)5
Avg Revenue beat(16)-1.31%
PT rev (1m)-0.88%
PT rev (3m)0.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.56%
EPS NY rev (1m)0%
EPS NY rev (3m)1.4%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.1%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.5 | ||
| Fwd PE | 23.35 | ||
| P/S | 2.39 | ||
| P/FCF | 30.49 | ||
| P/OCF | 21.25 | ||
| P/B | 4.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.26 |
EPS(TTM)3.74
EY3.28%
EPS(NY)4.89
Fwd EY4.28%
FCF(TTM)3.74
FCFY3.28%
OCF(TTM)5.37
OCFY4.71%
SpS47.67
BVpS23.13
TBVpS-11.38
PEG (NY)1.48
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.22% | ||
| ROE | 12.18% | ||
| ROCE | 8.73% | ||
| ROIC | 5.8% | ||
| ROICexc | 6.02% | ||
| ROICexgc | 18.03% | ||
| OM | 9.86% | ||
| PM (TTM) | 5.91% | ||
| GM | 23.46% | ||
| FCFM | 7.85% |
ROA(3y)2.55%
ROA(5y)2.06%
ROE(3y)8.17%
ROE(5y)6.51%
ROIC(3y)4.2%
ROIC(5y)3.33%
ROICexc(3y)4.34%
ROICexc(5y)3.5%
ROICexgc(3y)12.8%
ROICexgc(5y)10.08%
ROCE(3y)6.38%
ROCE(5y)5.04%
ROICexcg growth 3Y25.15%
ROICexcg growth 5Y0.54%
ROICexc growth 3Y21.52%
ROICexc growth 5Y-2.3%
OM growth 3Y8.14%
OM growth 5Y-6.38%
PM growth 3Y9.28%
PM growth 5Y-9.82%
GM growth 3Y-0.82%
GM growth 5Y-1.88%
F-Score9
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 4.19 | ||
| Debt/EBITDA | 2.42 | ||
| Cap/Depr | 101.1% | ||
| Cap/Sales | 3.41% | ||
| Interest Coverage | 3.91 | ||
| Cash Conversion | 85.11% | ||
| Profit Quality | 132.82% | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 2.72 |
F-Score9
WACC8.58%
ROIC/WACC0.68
Cap/Depr(3y)82.72%
Cap/Depr(5y)76.47%
Cap/Sales(3y)3.63%
Cap/Sales(5y)4.02%
Profit Quality(3y)180.37%
Profit Quality(5y)247.75%
High Growth Momentum
Growth
EPS 1Y (TTM)30.77%
EPS 3Y20.08%
EPS 5Y-1.06%
EPS Q2Q%50.98%
EPS Next Y20.6%
EPS Next 2Y18.49%
EPS Next 3Y17.57%
EPS Next 5YN/A
Revenue 1Y (TTM)9.71%
Revenue growth 3Y15.24%
Revenue growth 5Y5.43%
Sales Q2Q%6.88%
Revenue Next Year7.71%
Revenue Next 2Y7.36%
Revenue Next 3Y7.55%
Revenue Next 5YN/A
EBIT growth 1Y49.02%
EBIT growth 3Y24.62%
EBIT growth 5Y-1.3%
EBIT Next Year69.51%
EBIT Next 3Y28.37%
EBIT Next 5YN/A
FCF growth 1Y80.12%
FCF growth 3Y13.6%
FCF growth 5Y1.9%
OCF growth 1Y55.85%
OCF growth 3Y14.08%
OCF growth 5Y0.42%