It's been a good week for Bright Horizons Family Solutions Inc. (NYSE:BFAM) shareholders, because the company has just released its latest first-quarter results, and the shares gained 9.7% to US$114. Revenues were US$623m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.29 were also better than expected, beating analyst predictions by 13%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Bright Horizons Family Solutions' nine analysts is for revenues of US$2.67b in 2024. This would reflect a reasonable 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 70% to US$2.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.66b and earnings per share (EPS) of US$2.41 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$113, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Bright Horizons Family Solutions, with the most bullish analyst valuing it at US$128 and the most bearish at US$84.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bright Horizons Family Solutions' past performance and to peers in the same industry. It's clear from the latest estimates that Bright Horizons Family Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 9.9% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Bright Horizons Family Solutions is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$113, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Bright Horizons Family Solutions going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Bright Horizons Family Solutions has 2 warning signs we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.