Bread Financial Holdings, Inc.
Bread Financial Holdings, Inc. Fundamental Analysis
Bread Financial Holdings, Inc. (ADS) shows strong financial fundamentals with a PE ratio of 6.39, profit margin of 12.10%, and ROE of 15.50%. The company generates $3.7B in annual revenue with strong year-over-year growth of 64.18%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 79.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ADS's fundamental strength across five key dimensions:
Efficiency Score
ExcellentADS demonstrates superior asset utilization.
Valuation Score
ExcellentADS trades at attractive valuation levels.
Growth Score
ModerateADS shows steady but slowing expansion.
Financial Health Score
ModerateADS shows balanced financial health with some risks.
Profitability Score
ModerateADS maintains healthy but balanced margins.
Key Financial Metrics
Is ADS Expensive or Cheap?
P/E Ratio
ADS trades at 6.39 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ADS's PEG of 0.01 indicates potential undervaluation.
Price to Book
The market values Bread Financial Holdings, Inc. at 731.14 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 3.21 times EBITDA. This is generally considered low.
How Well Does ADS Make Money?
Net Profit Margin
For every $100 in sales, Bread Financial Holdings, Inc. keeps $12.10 as profit after all expenses.
Operating Margin
Core operations generate 12.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $15.50 in profit for every $100 of shareholder equity.
ROA
Bread Financial Holdings, Inc. generates $17.04 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Bread Financial Holdings, Inc. generates strong operating cash flow of $1.99B, reflecting robust business health.
Free Cash Flow
Bread Financial Holdings, Inc. generates strong free cash flow of $1.99B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $39.71 in free cash annually.
FCF Yield
ADS converts 59.70% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
6.39
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.01
vs 25 benchmark
P/B Ratio
Price to book value ratio
731.14
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.91
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.00
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.15
vs 25 benchmark
ROA
Return on assets percentage
17.04
vs 25 benchmark
ROCE
Return on capital employed
17.00
vs 25 benchmark
How ADS Stacks Against Its Sector Peers
| Metric | ADS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 6.39 | 18.88 | Better (Cheaper) |
| ROE | 15.50% | 801.00% | Weak |
| Net Margin | 12.10% | 2213.00% | Weak |
| Debt/Equity | 0.00 | 1.03 | Strong (Low Leverage) |
| Current Ratio | 0.00 | 615.97 | Weak Liquidity |
| ROA | 1704.24% | -19854.00% (disorted) | Strong |
ADS outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Bread Financial Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-9.26%
Industry Style: Value, Dividend, Cyclical
DecliningEPS CAGR
-51.23%
Industry Style: Value, Dividend, Cyclical
DecliningFCF CAGR
53.90%
Industry Style: Value, Dividend, Cyclical
High Growth