Bright Horizons Family Solutions Inc. (BFAM) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Bright Horizons Family Solutions's EV/EBITDA of 34.2 is above its 5-year median of 21.8.

P/B above the industry

Bright Horizons Family Solutions's price-to-book of 3.90 is above the Industrials median of 2.46.

Trading above fair value

The share price of $51.91 is above our fair value estimate of $30.34.

Margin of safety under 20%

The price is 71.1% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 13.2% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 34.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -167% over the last twelve months, against a 5-year average of 48.2% a year.

Growing slower than the industry

Revenue grew 6.7% over the last twelve months; the Industrials median is 7.9%.

Guidance raised

Bright Horizons Family Solutions raised its fiscal year 2026 diluted adjusted earnings per common share outlook on Jul 30, 2026.

Gross margin slipping

Gross margin was 22.8% over the last twelve months, against 24.2% a year earlier.

Return on equity under 15%

Return on equity was -13.0% over the last twelve months and averaged 9.1% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 0.1%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Bright Horizons Family Solutions's return on equity of -13.0% is below the Industrials median of 6.0%.

Earnings grew over 5 years

Net income grew 48.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was -4.4% over the last twelve months, against a 5-year average of 4.6%.

Net margin below the industry

Bright Horizons Family Solutions's net margin of -4.4% is below the Industrials median of 2.5%.

High debt

Debt is 169% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 80.3% five years ago to 169%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 33.0% of total debt.

Interest not well covered

Operating income covers interest expense 0.1 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.45 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.49; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Bright Horizons Family Solutions has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.