Bright Horizons Family Solutions Inc (BFAM, Financial) has recently demonstrated a notable performance in the stock market with a 14.17% increase over the past three months, bringing its current market capitalization to $7.19 billion. As of the latest trading price of $124.02, the stock has edged up by 0.45% in just one week. According to GuruFocus's valuation model, the current GF Value of $114.08 suggests that the stock is Fairly Valued, consistent with its valuation three months ago at $112.76.
Overview of Bright Horizons Family Solutions Inc
Bright Horizons Family Solutions Inc operates within the personal services industry, focusing on providing educational and care solutions. These services are primarily delivered through three segments: full-service center-based child care, backup care, and educational advisory services. The company's largest revenue stream comes from its full-service center-based child care services. Bright Horizons is predominantly active in North America, where it generates more than half of its revenue. The company's commitment to supporting work-life balance for its clients' employees is central to its business model.
Assessing Profitability
Bright Horizons holds a Profitability Rank of 7 out of 10, indicating robust profitability metrics relative to its peers. The company's operating margin stands at 7.26%, which is superior to 53.33% of 105 companies in the industry. Additionally, its Return on Equity (ROE) of 7.09% and Return on Assets (ROA) of 2.17% are also commendable, surpassing 46.46% and 45.79% of industry counterparts, respectively. The Return on Invested Capital (ROIC) at 2.97% further underscores its efficient capital use. Impressively, Bright Horizons has maintained profitability for the past ten years, a feat better than 98.97% of its industry peers.
Growth Trajectory
The company's Growth Rank is an impressive 8 out of 10. Over the past three years, its revenue per share has grown by 18.40%, ranking better than 75.53% of 94 companies in the same industry. Although the five-year revenue growth rate per share is more modest at 4.10%, it still ranks better than 58.33% of its peers. Looking ahead, the estimated total revenue growth rate for the next three to five years is 9.22%, which is superior to 86.67% of the industry. The EPS growth without NRI over the past three years is a robust 22.40%, and the future three to five-year estimated EPS growth rate is 17.63%, both showcasing strong growth potential.
Notable Shareholders
Among the notable investors, Ron Baron (Trades, Portfolio) holds 1,662,978 shares, representing 2.87% of the shares outstanding. Steven Cohen (Trades, Portfolio) owns 347,600 shares, accounting for 0.6% of the shares, while Joel Greenblatt (Trades, Portfolio) holds a smaller stake of 4,175 shares, or 0.01%.
Competitive Landscape
Bright Horizons operates in a competitive landscape with key players such as H&R Block Inc (HRB, Financial) with a market cap of $7.83 billion, Frontdoor Inc (FTDR, Financial) valued at $3.39 billion, and Service Corp International (SCI, Financial) with a market cap of $10.58 billion. These companies represent significant competition within the personal services industry.
Conclusion
The recent stock performance of Bright Horizons Family Solutions Inc, coupled with its solid profitability and growth metrics, presents a compelling case for value investors. The company's strategic positioning within the personal services sector, combined with its consistent profitability and growth trajectory, supports its current market valuation. Investors should consider these factors carefully when evaluating BFAM as a potential investment in their portfolios.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
