Bright Horizons Family Solutions Inc.

BFAM

Services-Child Day Care Services

Mkt Cap

$6.135B

PE

73.97

Debt

$959.1M

Cash

$69.4M

EV

$7.025B

FCF

$214.1M

Market Cap

$6.135B

P/E Ratio

73.97

Debt

$959.1M

Cash

$69.4M

EV

$7.025B

FCF

$214.1M

Charts data: {"Earnings":[{"time":"2014-12-30","value":71755000},{"time":"2015-12-30","value":93287000},{"time":"2016-12-30","value":93919000},{"time":"2017-12-30","value":155995000},{"time":"2018-12-30","value":157096000},{"time":"2019-12-30","value":179520000},{"time":"2020-12-30","value":26876000},{"time":"2021-12-30","value":70154000},{"time":"2022-12-30","value":80298000},{"time":"2023-12-30","value":74049000}],"Sales":[{"time":"2014-12-30","value":1352999000},{"time":"2015-12-30","value":1458445000},{"time":"2016-12-30","value":1569841000},{"time":"2017-12-30","value":1740905000},{"time":"2018-12-30","value":1903182000},{"time":"2019-12-30","value":2062017000},{"time":"2020-12-30","value":1515093000},{"time":"2021-12-30","value":1755307000},{"time":"2022-12-30","value":2020487000},{"time":"2023-12-30","value":2418257000}],"Net Margins":[{"time":"2014-12-30","value":0.05303403771917052},{"time":"2015-12-30","value":0.06396333080781243},{"time":"2016-12-30","value":0.0598270780289214},{"time":"2017-12-30","value":0.0896056935904027},{"time":"2018-12-30","value":0.08254386600966171},{"time":"2019-12-30","value":0.08706038795994407},{"time":"2020-12-30","value":0.017738845074196766},{"time":"2021-12-30","value":0.039966797830806804},{"time":"2022-12-30","value":0.03974190380833928},{"time":"2023-12-30","value":0.030620814909250754}],"Assets":[{"time":"2014-12-30","value":2141076000},{"time":"2015-12-30","value":2150541000},{"time":"2016-12-30","value":2359017000},{"time":"2017-12-30","value":2468644000},{"time":"2018-12-30","value":2524306000},{"time":"2019-12-30","value":3330420000},{"time":"2020-12-30","value":3726648000},{"time":"2021-12-30","value":3640047000},{"time":"2022-12-30","value":3798869000},{"time":"2023-12-30","value":3896144000}],"Stockholders Equity":[{"time":"2014-12-30","value":750959000},{"time":"2015-12-30","value":727608000},{"time":"2016-12-30","value":687867000},{"time":"2017-12-30","value":749060000},{"time":"2018-12-30","value":779477000},{"time":"2019-12-30","value":971268000},{"time":"2020-12-30","value":1283797000},{"time":"2021-12-30","value":1179276000},{"time":"2022-12-30","value":1080453000},{"time":"2023-12-30","value":1212676000}],"ROE":[{"time":"2014-12-30","value":0.09555115525614581},{"time":"2015-12-30","value":0.12821051995030291},{"time":"2016-12-30","value":0.13653656884252333},{"time":"2017-12-30","value":0.20825434544629268},{"time":"2018-12-30","value":0.20154026353567842},{"time":"2019-12-30","value":0.18483055140290836},{"time":"2020-12-30","value":0.02093477395569549},{"time":"2021-12-30","value":0.0594890424294228},{"time":"2022-12-30","value":0.07431882738073753},{"time":"2023-12-30","value":0.06106247670441239}],"ROA":[{"time":"2014-12-30","value":0.06866781001701948},{"time":"2015-12-30","value":0.08452059272527239},{"time":"2016-12-30","value":0.08361024952342437},{"time":"2017-12-30","value":0.08321937063424292},{"time":"2018-12-30","value":0.09471712225063048},{"time":"2019-12-30","value":0.08041598356963986},{"time":"2020-12-30","value":0.014311520701713711},{"time":"2021-12-30","value":0.03544404783784385},{"time":"2022-12-30","value":0.041482083220032065},{"time":"2023-12-30","value":0.04395140426021215}]}

Bright Horizons Family Solutions Inc. provides early education and childcare, back-up care, educational advisory, and other workplace solutions services for employers and families. The company operates through three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory and Other Services. The Full Service Center-Based Child Care segment offers traditional center-based child care and early education, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, and self-sourced reimbursed care services through child care centers, school-age campuses, and in-home caregivers, as well as the back-up care network. The Educational Advisory and Other Services segment offers tuition assistance and student loan repayment program administration, workforce education, and related educational consulting services, as well as college admissions advisory services. It operated 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 Newton, Massachusetts.

Sector

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10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Bright Horizons Family Solutions Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$214.1M	$218M	$221.9M	$225.9M	$230M	$234.2M	$238.5M	$242.8M	$247.2M	$251.7M	$256.3M	$2.563B
DCF		$189.5M	$167.8M	$148.6M	$131.5M	$116.4M	$103.1M	$91.28M	$80.81M	$71.55M	$63.34M	$633.4M
Value	$1.797B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -8.2%

Earnings Stability 9.4%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	6.4%	6%	9%	8.3%	8.7%	1.8%	4%	4%	3.1%	3.3%
ROA	8.5%	8.4%	8.3%	9.5%	8%	1.4%	3.5%	4.1%	4.4%	4.8%
ROE	13%	14%	21%	20%	18%	2.1%	5.9%	7.4%	6.1%	6.7%

What is the average Net Margin?

The average Net Margin over the past 5 years is +4.96%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -1.08%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +5.17%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +10.04%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -2.84%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	10.02	7.87	7.27	5.28	4.75	8.34	6.06	8.29	5.83	4.48
Debt Equity	1.27	1.58	1.44	1.37	1.07	0.81	0.84	0.90	0.79	0.78
MIN
Graham Stability	-	-	100%	100%	100%	16%	58%	87%	100%	16%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 4.48.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.32.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.16.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	6.4%	4.9%	17%	20%	0.73%
Net Income	-3.3%	-14%	40%	-7.8%	-0.095%
Stockholders Equity	8.4%	9.2%	-1.9%	12%	0.78%
FCF	2.6%	-4%	9.8%	40%	-0.76%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +4.91%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.73%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -13.97%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -0.09%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +9.24%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +0.78%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -3.98%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -0.76%.