New Lifetime High Today: Bright Horizons Family Solutions (BFAM)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Bright Horizons Family Solutions ( BFAM) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Bright Horizons Family Solutions as such a stock due to the following factors:

  • BFAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.4 million.
  • BFAM has traded 3,705 shares today.
  • BFAM is trading at a new lifetime high.

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More details on BFAM:

Bright Horizons Family Solutions Inc. provides child care, early education, and other services for employers and families. It operates through three segments: Full-Service Center-Based Child Care, Back-Up Dependent Care, and Other Educational Advisory Services. BFAM has a PE ratio of 47.0. Currently there are 5 analysts that rate Bright Horizons Family Solutions a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Bright Horizons Family Solutions has been 160,800 shares per day over the past 30 days. Bright Horizons Family has a market cap of $3.1 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.48 and a short float of 2.9% with 4.30 days to cover. Shares are up 15% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bright Horizons Family Solutions as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, solid stock price performance, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • BRIGHT HORIZONS FAMILY SOLTN has improved earnings per share by 45.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BRIGHT HORIZONS FAMILY SOLTN increased its bottom line by earning $1.07 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus $1.07).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.5%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Diversified Consumer Services industry and the overall market, BRIGHT HORIZONS FAMILY SOLTN's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Diversified Consumer Services industry average, but is greater than that of the S&P 500. The net income increased by 40.4% when compared to the same quarter one year prior, rising from $16.05 million to $22.53 million.

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