Bright Horizons Family Solutions Inc. Just Recorded A 25% EPS Beat: Here's What Analysts Are Forecasting Next

Shareholders of Bright Horizons Family Solutions Inc. (NYSE:BFAM) will be pleased this week, given that the stock price is up 12% to US$132 following its latest second-quarter results. It looks like a credible result overall - although revenues of US$670m were what the analysts expected, Bright Horizons Family Solutions surprised by delivering a (statutory) profit of US$0.67 per share, an impressive 25% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Bright Horizons Family Solutions

Taking into account the latest results, the consensus forecast from Bright Horizons Family Solutions' nine analysts is for revenues of US$2.68b in 2024. This reflects an okay 5.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 49% to US$2.60. Before this earnings report, the analysts had been forecasting revenues of US$2.67b and earnings per share (EPS) of US$2.43 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 13% to US$130, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Bright Horizons Family Solutions analyst has a price target of US$155 per share, while the most pessimistic values it at US$92.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Bright Horizons Family Solutions shareholders.

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. The analysts are definitely expecting Bright Horizons Family Solutions' growth to accelerate, with the forecast 10% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.9% 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 important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Bright Horizons Family Solutions following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Bright Horizons Family Solutions analysts - 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.