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Bright Horizons
(NYSE:BFAM)
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Rating:71Outperform
Price Target:
$73.00
▼(-1.20% Downside)
Action:Reiterated
Date:07/31/26
BFAM scores well on improving financial performance and a constructive earnings outlook (raised EPS guidance driven by strong Back-up Care growth and margin expansion). The score is tempered by balance-sheet leverage and ongoing full-service/Australia headwinds, while valuation (P/E ~24 with no dividend) and mixed longer-term technical positioning (below the 200-day average) cap upside.
Positive Factors
Revenue and profit growth
Sustained revenue expansion alongside materially higher net margins indicates improving scale and operating performance. This supports stronger earnings power, creates more capacity to reinvest in services, and suggests the business has continued to broaden its customer and center base.
Negative Factors
Meaningful leverage
Meaningful leverage increases sensitivity to weaker operating conditions and financing costs, limiting flexibility when the company needs to invest or respond to demand changes. Higher borrowings also raise the importance of maintaining dependable cash generation and disciplined capital allocation.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and profit growth
Sustained revenue expansion alongside materially higher net margins indicates improving scale and operating performance. This supports stronger earnings power, creates more capacity to reinvest in services, and suggests the business has continued to broaden its customer and center base.
Read all positive factors
Bright Horizons Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down sales across regions (such as U.S. vs. international), showing where growth comes from and where the business is exposed to local labor markets, regulations and currency moves. For Bright Horizons, a heavy U.S. mix points to dependence on domestic employment trends while faster international growth can be a source of upside but may bring regulatory and execution risks.
Breaks down sales across regions (such as U.S. vs. international), showing where growth comes from and where the business is exposed to local labor markets, regulations and currency moves. For Bright Horizons, a heavy U.S. mix points to dependence on domestic employment trends while faster international growth can be a source of upside but may bring regulatory and execution risks.
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The Fly
The FlyBright Horizons (BFAM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.13B
Dividend YieldN/A
Average Volume (3M)680.56K
Price to Earnings (P/E)20.4
Beta (1Y)0.38
Revenue Growth8.51%
EPS Growth3.70%
CountryUS
Employees32,200
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)3.19
Shares Outstanding48,635,307
10 Day Avg. Volume657,611
30 Day Avg. Volume680,563
Financial Highlights & Ratios
PEG Ratio0.75
Price to Book (P/B)4.31
Price to Sales (P/S)1.97
P/FCF Ratio22.52
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$87.80Price Target Upside18.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)5.11
Revenue Forecast (FY)$3.10B
Bright Horizons Business Overview & Revenue Model
Company Description
Bright Horizons Family Solutions Inc., established in 1986 and headquartered in Newton, Massachusetts, offers a comprehensive suite of early education, child care, and workplace solutions designed for employers and their employees' families. The c...
How the Company Makes Money
Bright Horizons makes money primarily by delivering child care and other family support services under a mix of employer-sponsored and direct-to-consumer arrangements. A major revenue stream comes from its full-service child care centers, where fe...
Bright Horizons Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call highlighted multiple positive operational and financial developments: solid consolidated revenue growth (7%), a strong Back-up Care performance (19% revenue growth, margin expansion), raised EPS guidance, and continued cash generation and buybacks. Offsetting these positives are persistent challenges in Australia, headwinds from center closures and enrollment recovery in full service (keeping occupancy in the mid-60s), higher interest expense and tax rate impacts, and EdAssist engagement softness. Overall, the positive drivers—particularly durable Back-up Care growth, margin expansion, and improved guidance—outweigh the headwinds, though management continues to address geographic and portfolio weaknesses.Positive Updates
Quarterly Revenue and EPS Beat
Revenue grew 7% year-over-year to $779 million in Q2 2026 and adjusted EPS increased 20% to $1.28, both ahead of management expectations.
Negative Updates
Australia Enrollment and Profitability Pressure
Australia remains a material headwind: roughly a 100 basis point enrollment headwind in Q2, an estimated $20M–$25M operating loss in the geography for the year (about 150 basis points of full-service headwind), and management is evaluating portfolio actions and strategic options.
Read all updates
Q2-2026 Updates
Positive
Negative
Quarterly Revenue and EPS Beat
Revenue grew 7% year-over-year to $779 million in Q2 2026 and adjusted EPS increased 20% to $1.28, both ahead of management expectations.
Read all positive updates
Company Guidance
Management narrowed FY2026 revenue to $3.085B–$3.115B and raised adjusted EPS to $5.05–$5.15; segment guidance calls for Back‑up Care revenue growth of 13%–15% (with an operating margin target ~28%–30%), Full Service revenue growth of 2.5%–3.0% (with ~200 bps headwind from net center closings and ~100 bps from Australia and overall full‑service margins expected to be roughly flat, Australia a 50–75 bp drag), and Educational Advisory growth in the low single digits (operating margin ~20%); company expects FY interest expense of $58M–$60M, an adjusted effective tax rate of 28.5%, ~51.5M diluted shares, and reported Q3 revenue of $835M–$845M (~4%–5% growth) with Q3 Back‑up +12%–14%, Q3 Full Service +0.5%–1.0% (including ~225 bps net closures and 100 bps Australia headwinds), EdAssist low‑single‑digit growth, and Q3 adjusted EPS of $1.73–$1.78.Bright Horizons Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
64
Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.03B | 2.93B | 2.69B | 2.42B | 2.02B | 1.76B |
| Gross Profit | 706.15M | 691.05M | 619.61M | 531.72M | 478.65M | 415.01M |
| EBITDA | 407.70M | 408.07M | 344.54M | 281.92M | 257.81M | 235.28M |
| Net Income | 175.03M | 193.12M | 140.19M | 74.05M | 80.64M | 70.46M |
Balance Sheet | ||||||
| Total Assets | 3.79B | 4.15B | 3.85B | 3.90B | 3.80B | 3.64B |
| Cash, Cash Equivalents and Short-Term Investments | 163.69M | 155.98M | 122.03M | 93.57M | 53.92M | 283.69M |
| Total Debt | 2.05B | 1.76B | 1.79B | 1.86B | 1.97B | 1.78B |
| Total Liabilities | 2.85B | 2.81B | 2.57B | 2.68B | 2.72B | 2.46B |
| Stockholders Equity | 943.52M | 1.34B | 1.28B | 1.21B | 1.08B | 1.18B |
Cash Flow | ||||||
| Free Cash Flow | 233.74M | 256.36M | 240.15M | 165.12M | 117.92M | 163.76M |
| Operating Cash Flow | 330.10M | 347.68M | 337.46M | 256.14M | 188.47M | 227.25M |
| Investing Cash Flow | -105.23M | -103.79M | -117.76M | -126.94M | -278.05M | -117.39M |
| Financing Cash Flow | -251.30M | -230.38M | -183.81M | -91.63M | -121.34M | -230.03M |
Bright Horizons Technical Analysis
Negative
73.89
Price Trends
73.83
Negative
71.78
Negative
80.31
Negative
Market Momentum
-1.76
Positive
26.66
Positive
6.73
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFAM, the sentiment is Negative. The current price of 73.89 is above the 20-day moving average (MA) of 71.79, above the 50-day MA of 73.83, and below the 200-day MA of 80.31, indicating a bearish trend. The MACD of -1.76 indicates Positive momentum. The RSI at 26.66 is Positive, neither overbought nor oversold. The STOCH value of 6.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BFAM.
Bright Horizons Risk Analysis
Bright Horizons disclosed 29 risk factors in its most recent earnings report. Bright Horizons reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bright Horizons Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.48B | 21.11 | 102.24% | ― | 9.26% | 12.10% | |
71 Outperform | $3.13B | 20.41 | 14.42% | ― | 8.51% | 3.70% | |
71 Outperform | $5.53B | 7.78 | -229.09% | 3.81% | 4.90% | 26.87% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
48 Neutral | $147.73M | -1.48 | -33.75% | 1.88% | -11.63% | -108.59% | |
47 Neutral | $134.73M | -5.17 | -12.68% | 8.20% | -34.03% | -801.27% | |
40 Neutral | $3.68M | -0.52 | 1.38% | ― | -1.57% | ― |
* Consumer Cyclical Sector Average
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Bright Horizons
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.