XVARY Composite Score
56
/ 100
Below Average
Combines growth, value, risk, and momentum factors into a single institutional-grade score.
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What it is
Bright Horizons runs child care centers and backup care for employers and families.
How it gets paid
Last year Bright Horizons made $2.9B in revenue. Full Service Center-Based Child Care was the main engine at $2.12B, or 73% of sales.
Why it's growing
Revenue grew 9.2% last year. The 5.5% EPS beat matters because it shows the business kept more profit while revenue rose 12% to $802.8M.
What just happened
Bright Horizons beat by 5.5% as EPS hit $1.15 and revenue reached $802.8M.
At a Glance
B+ balance sheet — decent shape, but not bulletproof
55/100 earnings predictability — expect surprises
22.7x trailing p/e — priced about right
14.0% return on capital — nothing to write home about
XVARY composite: 56/100 — below average
What They Do
Bright Horizons runs child care centers and backup care for employers and families.
Bright Horizons runs 1,019 child care and early education centers across 5 countries. Your employer does not rebuild that network fast, so switching is painful. The business gets 73% of revenue from full-service centers, 23% from backup care, and 4% from advisory services.
How They Make Money
$2.9B
annual revenue · their business grew +9.2% last year
Full Service Center-Based Child Care
$2.12B
Back-Up Dependent Care
$0.67B
Educational Advisory Services
$0.12B
The Products That Matter
Employer-sponsored child care centers
Full Service Child Care
$2.1B · 73% of revenue
it's the core $2.1B business. When nearly three quarters of revenue comes from one segment, that segment is not just important. It is the story.
core driver
On-demand dependent care support
Back-Up Dependent Care
$667M · 23% of revenue
this segment contributes $667M. That's meaningful. It's also still less than one-third the size of the center business, which tells you where the operating weight sits.
second engine
Education advisory services
Educational Advisory Services
$116M · 4% of revenue
at $116M, this piece is real but small. In human-speak: it helps the mix, but you are not buying BFAM for this segment alone.
small piece
Key Numbers
$2.9B
annual revenue
That is the whole business in one number. A service company with $2.9B in sales is not a niche widget maker.
18.0%
operating margin
That means 18 cents of every sales dollar stays before interest and taxes. In child care, that is real breathing room.
14.0%
return on capital
That says each dollar invested in the business earns 14 cents back in operating profit. Most service firms do worse.
$748M
long-term debt
Debt is 11% of capital, so leverage is present but not running the show.
Financial Health
B+
Strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- long-term debt $748M (11% of capital)
- net profit margin 10.0% — keeps 10 cents of every dollar in revenue
- return on equity 18% — $0.18 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total Return vs. Market
You invested $10000 in BFAM 3 years ago → it's now worth $15880.
The index would have given you $13920.
source: institutional data · total return
What Just Happened
beat estimates
Bright Horizons beat by 5.5% as EPS hit $1.15 and revenue reached $802.8M.
Revenue was about $23M above our estimate and rose 12% from a year ago. Gains came from all three segments.
$802.8M
revenue
$1.15
eps
25.2%
gross margin
EPS beat
The 5.5% EPS beat matters because it shows the business kept more profit while revenue rose 12% to $802.8M.
-
Bright horizons reported strongerthan-expected 2025 third-quarter results.
-
Revenues of $802.8 million were nearly $23 million higher than our estimate and increased 12% compared to the previous-year tally.
-
The advance was driven by gains from all three of the company’s segments.
-
The full-service center-based child care division, which accounted for roughly 64% of september-period sales, posted a 6% rise in the top line.
-
The gain was largely due to tuition rate hikes at its child care centers.
source: company earnings report, 2026
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What Could Go Wrong
BFAM is not facing abstract risk. The page already shows a securities-fraud investigation, a revenue base where one segment contributes $2.1B of $2.9B, and a margin profile that looks stable until you zoom into the latest quarter.
High
Legal overhang
A shareholder rights law firm is investigating whether Bright Horizons and certain officers engaged in securities fraud. The source data gives you the headline, but no quantified financial exposure.
What matters: uncertainty alone can pressure the multiple, even if the operating business keeps producing decent numbers.
High
Segment concentration
Full service center-based child care produces $2.1B, or 73% of total revenue. Back-up care at $667M helps, but it does not offset a real stumble in the core center business.
What matters: diversification exists, just not enough to change who the main character is.
Med
Margin sensitivity
The company shows a 17.0% operating margin, but the latest quarterly margin on this page is 6.6%. That is not a rounding error. It tells you labor, occupancy, and pricing still move the story.
What matters: a 9.4% net margin business does not have endless room for operating mistakes.
Med
Forecast reliability
Earnings predictability is 55 / 100. In human terms, this is forecastable, but not clean. You are buying an operator, not a clock.
What matters: when predictability is average, a fair multiple stops looking fair fast.
The quiet part: BFAM looks defensive from a distance because child care sounds steady. Up close, you are still underwriting one dominant segment, mixed margin signals, and a live legal question.
Source: institutional data · regulatory filings · risk analysis
Pay Attention To
Core metric
Full service child care growth
This segment is $2.1B and 73% of revenue. If it slows, the whole thesis slows with it.
Risk
Investigation updates
Right now the legal issue is an overhang without a disclosed dollar impact. Any escalation changes the conversation quickly.
Calendar
Next earnings release
You want to see whether the latest $803M quarterly revenue and $1.37 EPS were momentum or just one clean quarter.
Trend
Price-led growth versus demand-led growth
The source attributes part of the center business growth to tuition rate hikes. That's useful until families or employer clients push back.
Analyst Rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts expect this to behave like an average stock, not a breakout.
risk profile
average
stability score 3 — neither especially safe nor especially fragile.
chart momentum
below average
technical score 4 — the tape is not giving you much help right now.
earnings predictability
55 / 100
Forecasting this business is possible, just not easy. Expect more variance than you would from a cleaner compounder.
Source: institutional data
Institutional Activity
institutions have been net buying for 3 consecutive quarters — 213 buyers vs. 178 sellers in 3q2025. total institutional holdings: 57.9M shares. net buying for 3 quarters.
Source: institutional data
Price Targets
3-5 year target range
$86
$179
$102
Current price
$133
Target midpoint · +30% from current · 3-5yr high: $260 (+155% · 26% ann'l return)
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