Bright Horizons Family Solutions Inc.
Bright Horizons Family Solutions Inc. Fundamental Analysis
Bright Horizons Family Solutions Inc. (BFAM) shows moderate financial fundamentals with a PE ratio of 20.88, profit margin of 6.59%, and ROE of 14.07%. The company generates $2.9B in annual revenue with strong year-over-year growth of 11.07%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.1/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze BFAM's fundamental strength across five key dimensions:
Efficiency Score
WeakBFAM struggles to generate sufficient returns from assets.
Valuation Score
ExcellentBFAM trades at attractive valuation levels.
Growth Score
ExcellentBFAM delivers strong and consistent growth momentum.
Financial Health Score
WeakBFAM carries high financial risk with limited liquidity.
Profitability Score
WeakBFAM struggles to sustain strong margins.
Key Financial Metrics
Is BFAM Expensive or Cheap?
P/E Ratio
BFAM trades at 20.88 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, BFAM's PEG of -6.64 indicates potential undervaluation.
Price to Book
The market values Bright Horizons Family Solutions Inc. at 3.01 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 4.25 times EBITDA. This is generally considered low.
How Well Does BFAM Make Money?
Net Profit Margin
For every $100 in sales, Bright Horizons Family Solutions Inc. keeps $6.59 as profit after all expenses.
Operating Margin
Core operations generate 10.73 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.07 in profit for every $100 of shareholder equity.
ROA
Bright Horizons Family Solutions Inc. generates $4.96 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Bright Horizons Family Solutions Inc. produces operating cash flow of $349.77M, showing steady but balanced cash generation.
Free Cash Flow
Bright Horizons Family Solutions Inc. produces free cash flow of $257.90M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.56 in free cash annually.
FCF Yield
BFAM converts 6.39% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.88
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-6.64
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.01
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.38
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.84
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.52
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How BFAM Stacks Against Its Sector Peers
| Metric | BFAM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.88 | 24.85 | Better (Cheaper) |
| ROE | 14.07% | 1165.00% | Weak |
| Net Margin | 6.59% | 749.00% | Weak |
| Debt/Equity | 1.84 | 0.76 | Weak (High Leverage) |
| Current Ratio | 0.52 | 9.23 | Weak Liquidity |
| ROA | 4.96% | 1271.00% | Weak |
BFAM outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Bright Horizons Family Solutions Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
30.05%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-22.41%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
1.99%
Industry Style: Cyclical, Growth, Discretionary
Growing