BFAM - Bright Horizons: Strong Demand Outlook Offset By Modest Upside Potential
2024-02-15 07:05:42 ET
Summary
- Bright Horizons' past financials have demonstrated strong revenue growth and recovery from the COVID-19 impact. Margins have been gradually recovering, but have yet to reach 2019's level.
- Demand for childcare services is expected to remain robust as more women pursue full-time careers and the number of dual-income families increases.
- FY2023 continues to report strong revenue growth. In addition, adjusted margins remain robust year-over-year.
- However, my conservative valuation model indicates modest single-digit upside potential. Therefore, on this aspect, I am recommending a hold rating.
Synopsis
Bright Horizons Family Solutions ( BFAM ) has been in operation for 35 years, and it specializes in providing care and education services for working families. It is one of the leading providers of quality early education, childcare, and family care services. The services BFAM offers are mainly offered through multiyear contracts with employers, which offer such services as part of their employment benefit package to their employees. Some of the aims of such a benefit package are to improve their talent acquisition and recruitment processes, employee retention, and productivity....
Bright Horizons: Strong Demand Outlook Offset By Modest Upside Potential