Is Now the Time to Invest in Bright Horizons Family Solutions Inc....

Is Now the Time to Invest in Bright Horizons Family Solutions Inc. (BFAM)?


Many stocks have been testing new highs in 2020, and one of the most notable is Bright Horizons Family Solutions Inc. (BFAM). Currently, BFAM is trading at $136.25 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $122.38.

To add more color to this target, the company’s high over the last year is $176.98 and the low is $64.23. Over the last 52 weeks, BFAM is down -23.01% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, BFAM reported a profit of $108.86 million. Bright Horizons Family Solutions Inc. also saw revenues increase to $506.32 million. In addition, BFAM has free cash flow of $46.99 million as of 03-2020 The company’s EBITDA came in at $71.5 million which compares well with its peers.

BFAM booked profit margins of 8.20%, its Return on Equity (ROE) is 18.40%, and its Return on Assets is 5.20%. All told, it is clear that, BFAM needs to be on your watchlist.

About Bright Horizons Family Solutions Inc.

If readers are unfamiliar, Bright Horizons Family Solutions Inc. provides child care and early education services, back-up care services, educational advisory services, and other workplace solutions for employers and families. The company operates through three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory Services. The Full Service Center-Based Child Care segment offers traditional center-based child care, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, and in-home child and adult/elder dependent care services. The Educational Advisory Services segment offers tuition assistance and student loan repayment program administration, and related educational consulting services, as well as college admissions advisory services. As of December 31, 2019, it operated 1,084 child care and early education centers in the United States, Puerto Rico, the United Kingdom, Canada, the Netherlands, and India. The company was formerly known as Bright Horizons Solutions Corp. and changed its name to Bright Horizons Family Solutions Inc. in July 2012. Bright Horizons Family Solutions Inc. was founded in 1986 and is headquartered in Watertown, Massachusetts.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. BFAM has a short ratio of 1.38 and outstanding shares of 57.93M.

Company Outlook

BFAM has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.69 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 2.87. Bright Horizons Family Solutions Inc. BFAM also noted assets of $3.35 billion at the end of the last quarter. Investors should also keep an eye on sector updates as BFAM has historically followed its peers on positive news.

All told, Bright Horizons Family Solutions Inc. BFAM has strung together solid data and demonstrated underlying fundamentals. At its current valuation, BFAM represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Bright Horizons Family Solutions Inc. BFAM is now commanding a market cap of 7.72B and a float of 56.64M. BFAM is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of BFAM stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in BFAM, either long or short, and we have not been compensated for this article.