BFAM Stock Forecast & Price Target

Bright Horizons Family Solutions Inc. has demonstrated significant revenue growth of approximately 20% in 2023, with projections suggesting a continued growth rate of around 11% for 2024, primarily driven by improved utilization of Full-Service Centers (FSC) and robust expansion in Backup Care (BUCA). Over the period from 2023 to 2028, the company is expected to achieve a revenue compound annual growth rate (CAGR) of approximately 6%, with adjusted EBITDA anticipated to grow at a CAGR of around 10%. Furthermore, management expects notable improvements in margin expansion, with a forecast of roughly 630 basis points in adjusted operating income (AOI) margin growth and a 4% increase in FSC pricing anticipated for 2025.

Bright Horizons Family Solutions Inc. has experienced notable stock weakness following its 3Q24 earnings release, which revealed slightly slowing top-line growth and potential challenges to margin expansion. The company faces pricing headwinds, low enrollment growth, and minimal recovery in utilization rates, leading to conservative expectations for HSD top-line growth for 2025 and around 10% EPS growth, which falls significantly below consensus. Furthermore, although the company's EBITDA CAGR remains positive, its operating margins are projected to remain below pre-pandemic levels, indicating ongoing structural challenges amidst a shift toward remote work and increased competition.