Earnings Beat: Bright Horizons Family Solutions Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Bright Horizons Family Solutions Inc. (NYSE:BFAM) had a good week, as its shares rose 4.3% to close at US$111 following the release of its first-quarter results. 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.

View our latest analysis for Bright Horizons Family Solutions

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 an okay 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 70% to US$2.43. Before this earnings report, the analysts had been forecasting 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$111, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Bright Horizons Family Solutions at US$125 per share, while the most bearish prices it at US$84.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Bright Horizons Family Solutions' growth to accelerate, with the forecast 9.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.7% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Bright Horizons Family Solutions is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Bright Horizons Family Solutions analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Bright Horizons Family Solutions that you need to take into consideration.

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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.