Bread Financial Holdings (BFH) AI Stock Analysis

• Market Cap: $2.58B
• Dividend Yield: 1.53%
• Average Volume (3M): 660.02K
• Price to Earnings (P/E): 9.4
• Beta (1Y): 1.31
• Revenue Growth: -4.15%
• EPS Growth: -38.33%
• Country: US
• Employees: 6,000
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 3.14
• Shares Outstanding: 46,642,430
• 10 Day Avg. Volume: 741,027
• 30 Day Avg. Volume: 660,016
• PEG Ratio: -0.18
• Price to Book (P/B): 0.99
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 1.63
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 0.66
• Enterprise Value/Gross Profit: 1.27
• Enterprise Value/Ebitda: 6.61
• 1Y Price Target: $69.09
• Price Target Upside: 25.57% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 72 Outperform
• Price Target: $64.00 ▲(16.32% Upside)

Bread Financial Holdings scores well due to strong earnings call performance and attractive valuation. However, technical indicators suggest bearish momentum, and financial performance shows areas needing growth stimulation. The absence of significant corporate events further concentrates the score on these factors.

Positive Factors

Operational Excellence

Maintaining flat noninterest expenses amid rising costs shows strong operational control, enhancing long-term profitability and efficiency.

Partnership Extensions

Extending partnerships with major clients like Caesars Entertainment ensures sustained revenue streams and strengthens market position.

Direct-to-Consumer Deposit Growth

Growing consumer deposits enhance liquidity and funding stability, supporting future lending and investment opportunities.

Negative Factors

Revenue Decline

A decline in revenue indicates challenges in maintaining growth, potentially impacting long-term financial performance if not addressed.

Challenges with Loan Growth

Decreasing loan volumes suggest difficulties in expanding the lending portfolio, which could limit future revenue growth and market share.

Rising Debt Levels

Moderate leverage can constrain financial flexibility and increase risk, particularly if economic conditions worsen or interest rates rise.

Bread Financial Holdings Business Overview & Revenue Model

Company Description

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for approximately 130 private label and co-brand credit card programs, as well as through Bread partnerships to approximately 500 small-and medium-sized businesses merchants; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs and Bread BNPL (installment loans, split-pay) products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products, including installment and split-pay solutions. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was founded in 1996 and is headquartered in Columbus, Ohio.

How the Company Makes Money

Bread Financial Holdings generates revenue through multiple streams primarily centered around interest income from consumer loans and transaction fees. The company issues credit cards and provides financing solutions, earning interest on outstanding balances. Additionally, BFH benefits from merchant partnerships, where it charges transaction fees for processing payments made through its financing options. The company may also generate income from late payment fees and other ancillary services related to credit management. Key partnerships with retail and e-commerce merchants allow BFH to expand its customer base and drive volume, contributing significantly to its overall earnings.

Bread Financial Holdings Financial Statement Overview

Summary

Bread Financial Holdings shows stable profitability with strong margins and efficient cash flow management. However, moderate leverage and slight declines in revenue and free cash flow growth indicate a need for strategic growth initiatives.

Income Statement

The income statement shows stable performance with a gross profit margin of 51.43% and a net profit margin of 5.89% for TTM (Trailing-Twelve-Months). The EBIT margin stands at 8.20% and EBITDA margin at 10.05%. There is a slight revenue growth rate decline of 0.92% from the previous year, indicating a need for growth stimulation.

Balance Sheet

The balance sheet displays a debt-to-equity ratio of 1.67, indicating moderate leverage. Return on equity (ROE) is robust at 9.13%. The equity ratio is 13.70%, reflecting a healthy balance between assets financed by debt and equity. However, the leverage levels could pose risks if not managed carefully.

Cash Flow

Cash flow analysis reveals strong free cash flow to net income ratio of 6.51 for TTM, suggesting efficient cash generation relative to earnings. Operating cash flow to net income ratio is 6.45, indicating robust cash flow management. The free cash flow growth rate is slightly negative at -1.98%, which could benefit from improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.72B	4.80B	5.17B	4.37B	3.65B	3.80B
Gross Profit	2.45B	2.44B	3.07B	2.28B	2.06B	2.03B
EBITDA	470.00M	471.00M	1.08B	413.00M	1.17B	549.00M
Net Income	286.00M	277.00M	718.00M	223.00M	801.00M	214.00M
Balance Sheet
Total Assets	21.82B	22.89B	23.14B	25.41B	21.75B	22.55B
Cash, Cash Equivalents and Short-Term Investments	3.98B	3.85B	3.76B	3.99B	3.11B	3.02B
Total Debt	4.23B	5.68B	5.44B	8.13B	7.57B	8.70B
Total Liabilities	18.66B	19.84B	20.22B	23.14B	19.66B	21.03B
Stockholders Equity	3.17B	3.05B	2.92B	2.27B	2.09B	1.52B
Cash Flow
Free Cash Flow	1.88B	1.86B	1.99B	1.78B	1.46B	1.83B
Operating Cash Flow	1.85B	1.86B	1.99B	1.85B	1.54B	1.88B
Investing Cash Flow	-1.45B	-1.17B	788.00M	-5.11B	-1.69B	1.77B
Financing Cash Flow	-658.00M	-592.00M	-3.09B	3.27B	608.00M	-4.17B

Bread Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 55.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BFH, the sentiment is Negative. The current price of 55.02 is below the 20-day moving average (MA) of 59.20, below the 50-day MA of 60.90, and below the 200-day MA of 56.23, indicating a bearish trend. The MACD of -2.07 indicates Positive momentum. The RSI at 35.56 is Neutral, neither overbought nor oversold. The STOCH value of 19.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BFH.

Bread Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENVA	76 Outperform	$2.72B	11.49	21.56%	―	23.42%	59.17%
BFH	72 Outperform	$2.58B	9.39	9.19%	1.53%	-4.15%	-38.33%
WU	69 Neutral	$2.64B	3.08	135.32%	11.62%	-3.83%	62.05%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SEZL	63 Neutral	$2.81B	27.97	115.73%	―	92.95%	151.46%
LC	61 Neutral	$1.77B	24.59	5.50%	―	7.54%	70.26%
LU	52 Neutral	$2.43B	―	-3.79%	4.57%	―	―

Bread Financial Holdings Corporate Events

Bread Financial Reports Improved August 2025 Performance

On September 9, 2025, Bread Financial Holdings, Inc. released a performance update for August 2025, highlighting a slight decrease in both net loss and delinquency rates compared to the same period in 2024. The net loss rate decreased from 7.8% to 7.6%, and the delinquency rate dropped from 6.2% to 5.8%, indicating improved financial health and potentially strengthening the company’s position in the competitive financial services market.

Bread Financial Announces $200M Stock Repurchase Plan

On August 27, 2025, Bread Financial Holdings announced that its Board of Directors has approved a plan to repurchase up to $200 million of its common stock. The initiative is part of the company’s strategy to strengthen its capital position and return value to shareholders, though the repurchase is subject to market conditions and regulatory approvals.

Bread Financial Announces Tender Offer Results

On August 22, 2025, Bread Financial Holdings announced the expiration and results of its cash tender offers for its 9.750% Senior Notes due 2029 and 8.375% Fixed-Rate Reset Subordinated Notes due 2035. The tender offers, which expired on August 21, 2025, involved a total of $150,000,000 in aggregate principal amount, with $31,288,000 of the 2029 Notes and $121,000 of the 2035 Notes tendered. The results of these offers reflect Bread Financial’s strategic financial management and may impact its debt profile and market positioning.

Bread Financial Reports Improved Financial Health in Update

On August 15, 2025, Bread Financial Holdings, Inc. released a performance update for the period ending July 31, 2025. The update highlighted a decrease in both net loss and delinquency rates compared to the previous year, with the net loss rate dropping from 8.0% to 7.6% and the delinquency rate falling from 6.2% to 5.8%. These improvements suggest a positive impact on the company’s financial health and may enhance its competitive positioning in the financial services industry.

Bread Financial Announces Early Tender Results for Notes

On August 7, 2025, Bread Financial Holdings announced the early tender results of its cash tender offer for its 9.750% Senior Notes due 2029 and 8.375% Fixed-Rate Reset Subordinated Notes due 2035. The company reported that $28,402,000 of the 2029 Notes and $121,000 of the 2035 Notes were tendered by the early participation date. The settlement for these notes is expected on August 11, 2025, with total consideration provided for valid tenders. This move is part of Bread Financial’s strategic financial management, potentially impacting its debt structure and market positioning.

Bread Financial Announces $150M Debt Repurchase Plan

On July 24, 2025, Bread Financial Holdings announced a cash tender offer to repurchase up to $150 million of its 9.750% Senior Notes due 2029 and 8.375% Fixed-Rate Reset Subordinated Notes due 2035. This strategic financial move aims to manage the company’s debt profile and potentially improve its financial stability. The tender offers, which include an early participation incentive, are set to expire on August 21, 2025, and are conducted through a modified Dutch Auction procedure, allowing note holders to specify their minimum acceptable bid prices.

Bread Financial Reports Strong Q2 2025 Results

On July 24, 2025, Bread Financial Holdings announced its second quarter 2025 financial results, reporting a net income of $139 million and a 7% increase in tangible book value per common share. The company declared a quarterly cash dividend of $0.21 per share, payable on September 12, 2025. Despite a slight decrease in average loans due to softer consumer spending, the company saw a 4% increase in credit sales year-over-year. Bread Financial completed a $150 million share repurchase program and a tender offer for senior notes, reflecting its commitment to operational excellence and shareholder value. The company also extended its partnership with Caesars Entertainment, launching a new rewards credit card. The outlook for 2025 anticipates stable consumer financial health, with expectations of flat to slightly down average loan growth and relatively flat total revenue compared to 2024.

Bread Financial Reports Q2 2025 Performance Update

On July 24, 2025, Bread Financial Holdings reported its performance update for the period ending June 30, 2025. The company experienced a slight year-over-year decrease in average credit card and other loans by 1%, with net principal losses amounting to $348 million and a net loss rate of 7.9%. The delinquency rate improved from 6.0% in 2024 to 5.7% in 2025. The impact of hurricanes Helene and Milton in 2024 led to a temporary freeze on delinquency progression, affecting the net principal losses and net loss rate in the second quarter of 2025.

Bread Financial Reports May 2025 Performance Update

On June 11, 2025, Bread Financial Holdings, Inc. released a performance update for May 2025, highlighting a year-over-year decrease in average credit card and other loans by 1%, with net principal losses at $120 million and a net loss rate of 8.0%. The company noted that actions taken in response to hurricanes Helene and Milton in 2024, which included freezing delinquency progression for affected cardholders, resulted in lower net principal losses and net loss rates in the fourth quarter of 2024, but are expected to negatively impact these metrics in the second quarter of 2025.