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Bright Horizons Family Solutions Inc. (BFAM) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Bright Horizons Family Solutions (BFAM - Free Report) ? Shares have been on the move with the stock up 15.2% over the past month. The stock hit a new 52-week high of $138.25 in the previous session. Bright Horizons Family Solutions has gained 44.6% since the start of the year compared to the -2.4% move for the Zacks Consumer Discretionary sector and the 2% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 1, 2024, Bright Horizons reported EPS of $0.88 versus consensus estimate of $0.72 while it beat the consensus revenue estimate by 0.83%.
For the current fiscal year, Bright Horizons is expected to post earnings of $3.37 per share on $2.68 billion in revenues. This represents a 18.66% change in EPS on a 10.89% change in revenues. For the next fiscal year, the company is expected to earn $4.32 per share on $2.94 billion in revenues. This represents a year-over-year change of 28.34% and 9.52%, respectively.
Valuation Metrics
Bright Horizons may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Bright Horizons has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 40.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 30.1X versus its peer group's average of 10.7X. Additionally, the stock has a PEG ratio of 4.19. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Bright Horizons currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Bright Horizons fits the bill. Thus, it seems as though Bright Horizons shares could have potential in the weeks and months to come.
How Does BFAM Stack Up to the Competition?
Shares of BFAM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Stride, Inc. (LRN - Free Report) . LRN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Stride, Inc. beat our consensus estimate by 9.23%, and for the current fiscal year, LRN is expected to post earnings of $5.05 per share on revenue of $2.17 billion.
Shares of Stride, Inc. have gained 15.4% over the past month, and currently trade at a forward P/E of 16.25X and a P/CF of 11.24X.
The Schools industry is in the top 23% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BFAM and LRN, even beyond their own solid fundamental situation.
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Bright Horizons Family Solutions Inc. (BFAM) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Bright Horizons Family Solutions (BFAM - Free Report) ? Shares have been on the move with the stock up 15.2% over the past month. The stock hit a new 52-week high of $138.25 in the previous session. Bright Horizons Family Solutions has gained 44.6% since the start of the year compared to the -2.4% move for the Zacks Consumer Discretionary sector and the 2% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 1, 2024, Bright Horizons reported EPS of $0.88 versus consensus estimate of $0.72 while it beat the consensus revenue estimate by 0.83%.
For the current fiscal year, Bright Horizons is expected to post earnings of $3.37 per share on $2.68 billion in revenues. This represents a 18.66% change in EPS on a 10.89% change in revenues. For the next fiscal year, the company is expected to earn $4.32 per share on $2.94 billion in revenues. This represents a year-over-year change of 28.34% and 9.52%, respectively.
Valuation Metrics
Bright Horizons may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Bright Horizons has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 40.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 30.1X versus its peer group's average of 10.7X. Additionally, the stock has a PEG ratio of 4.19. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Bright Horizons currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Bright Horizons fits the bill. Thus, it seems as though Bright Horizons shares could have potential in the weeks and months to come.
How Does BFAM Stack Up to the Competition?
Shares of BFAM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Stride, Inc. (LRN - Free Report) . LRN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Stride, Inc. beat our consensus estimate by 9.23%, and for the current fiscal year, LRN is expected to post earnings of $5.05 per share on revenue of $2.17 billion.
Shares of Stride, Inc. have gained 15.4% over the past month, and currently trade at a forward P/E of 16.25X and a P/CF of 11.24X.
The Schools industry is in the top 23% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BFAM and LRN, even beyond their own solid fundamental situation.