Prepare Yourself for Liftoff: Bright Horizons Family Solutions Inc. (BFAM)

Bright Horizons Family Solutions Inc. (NYSE: BFAM) stock fell -2.17% on Monday to $85.76 against a previous-day closing price of $87.66. With 0.55 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.37 million shares. During the session, the Personal Services company that operates in wider Consumer Cyclical sector, reached to the highest price of $88.26 whereas the lowest price it dropped to was $85.59. The 52-week range on BFAM shows that it touched its highest point at $98.87 and its lowest point at $54.19 during that stretch. It currently has a 1-year price target of $90.70. Beta for the stock currently stands at 1.21.

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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 -7.04%, but this was down by -5.56% over a month. Three-month performance dropped to -8.52% while six-month performance rose 10.06%. The stock gained 31.94% in the past year, while it has gained 35.91% so far this year. A look at the trailing 12-month EPS for BFAM yields 1.12 with Next year EPS estimates of 3.46. For the next quarter, that number is 0.81. This implies an EPS growth rate of 19.10% for this year and 26.47% for next year. EPS is expected to grow by 17.07% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -9.30%.

Float and Shares Shorts:

At present, 57.71 million BFAM shares are outstanding with a float of 57.21 million shares on hand for trading. On Aug 30, 2023, short shares totaled 1.77 million, which was 3.06% higher than short shares on Jul 30, 2023. 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 107.30% of BFAM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 8.54% of BFAM, in contrast to 67.28% held by mutual funds. Shares owned by individuals account for 41.99%. As the largest shareholder in BFAM with 9.00% of the stake, The Vanguard Group, Inc. holds 5,207,684 shares worth 5,207,684. A second-largest stockholder of BFAM, T. Rowe Price Investment Manageme, holds 4,782,454 shares, controlling over 8.26% of the firm’s shares. Massachusetts Financial Services is the third largest shareholder in BFAM, holding 4,695,168 shares or 8.11% stake. With a 4.13% stake in BFAM, the MFS Mid Cap Growth Fund is the largest stakeholder. A total of 2,390,667 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 3.10% of BFAM stock, is the second-largest Mutual Fund holder. It holds 1,796,490 shares valued at 169.62 million. T Rowe Price Mid Cap Value Fund holds 2.80% of the stake in BFAM, owning 1,617,918 shares worth 152.76 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, BFAM reported revenue of $490.34M and operating income of $47.82M. The EBITDA in the recently reported quarter was $72.91M and diluted EPS was $0.42.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for BFAM since 0 analysts follow the stock currently. 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 $105.00 and a low target of $64.00, the average target price over the next 12 months is $90.70. Based on these targets, BFAM could surge 22.43% to reach the target high and fall by -25.37% to reach the target low. Reaching the average price target will result in a growth of 5.76% 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.

Summary of Insider Activity:

Insiders traded BFAM stock several times over the past three months with 9 Buys and 1 Sells. In these transactions, 10,326 shares were bought while 10,000 shares were sold. The number of buy transactions has increased to 20 while that of sell transactions has risen to 11 over the past year. The total number of shares bought during that period was 84,569 while 55,180 shares were sold.

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