This trade activity should not be overlooked: Bright Horizons Family Solutions Inc. (BFAM)

Bright Horizons Family Solutions Inc. (NYSE: BFAM) stock fell -12.79% on Friday to $82.42 against a previous-day closing price of $94.51. With 1.39 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.59 million shares. During the session, the Personal Services company that operates in wider Consumer Cyclical sector, reached to the highest price of $89.76 whereas the lowest price it dropped to was $80.77. The 52-week range on BFAM shows that it touched its highest point at $171.91 and its lowest point at $71.38 during that stretch. It currently has a 1-year price target of $118.25. Beta for the stock currently stands at 0.99.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of BFAM was down-trending over the past week, with a drop of -11.18%, but this was down by -8.00% over a month. Three-month performance dropped to -24.45% while six-month performance fell -35.49%. The stock lost -43.99% in the past year, while it has lost -34.52% so far this year. A look at the trailing 12-month EPS for BFAM yields 1.36 with Next year EPS estimates of 4.02. For the next quarter, that number is 0.70. This implies an EPS growth rate of 158.60% for this year and 31.35% for next year. EPS is expected to grow by 41.80% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -5.90%.

Float and Shares Shorts:

At present, 59.09 million BFAM shares are outstanding with a float of 58.29 million shares on hand for trading. On Jul 14, 2022, short shares totaled 0.94 million, which was 1.58% higher than short shares on Jun 14, 2022. In addition to Mr. Stephen Howard Kramer as the firm’s CEO, Pres & Director, Ms. Elizabeth J. Boland serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 110.21% of BFAM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 8.25% of BFAM, in contrast to 69.59% held by mutual funds. Shares owned by individuals account for 34.17%. As the largest shareholder in BFAM with 14.78% of the stake, T. Rowe Price Associates, Inc. holds 8,779,013 shares worth 8,779,013. A second-largest stockholder of BFAM, The Vanguard Group, Inc., holds 5,255,233 shares, controlling over 8.85% of the firm’s shares. JPMorgan Investment Management, I is the third largest shareholder in BFAM, holding 3,152,800 shares or 5.31% stake. With a 3.80% stake in BFAM, the MFS Mid Cap Growth Fund is the largest stakeholder. A total of 2,257,532 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.94% of BFAM stock, is the second-largest Mutual Fund holder. It holds 1,748,345 shares valued at 147.77 million. T Rowe Price Mid Cap Growth Fund holds 2.86% of the stake in BFAM, owning 1,700,000 shares worth 143.68 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for BFAM since 9 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With BFAM analysts setting a high price target of $145.00 and a low target of $83.00, the average target price over the next 12 months is $121.22. Based on these targets, BFAM could surge 75.93% to reach the target high and rise by 0.7% to reach the target low. Reaching the average price target will result in a growth of 47.08% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. BFAM will report FY 2022 earnings on 02/15/2023. Analysts have provided yearly estimates in a range of $3.18 being high and $2.91 being low. For BFAM, this leads to a yearly average estimate of $3.06. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Bright Horizons Family Solutions Inc. surprised analysts by $0.01 when it reported $0.71 EPS against a consensus estimate of $0.70. The surprise factor in the prior quarter was $0.05. Based on analyst estimates, the high estimate for the next quarter is $1.04 and the low estimate is $0.85. The average estimate for the next quarter is thus $0.93.

Summary of Insider Activity:

Insiders traded BFAM stock several times over the past three months with 11 Buys and 1 Sells. In these transactions, 24,890 shares were bought while 10,510 shares were sold. The number of buy transactions has increased to 31 while that of sell transactions has risen to 21 over the past year. The total number of shares bought during that period was 251,602 while 220,769 shares were sold.

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