BFAM
Bright Horizons Family Solutions Inc.
$71.15
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 29.8% below fair value
You pay
$71.15
Bear
$61.63
Fair
$101.40
Bull
$142.27
Bear
$61.63
-13.4%
7% stage 1 growth, 11% discount
Fair
$101.40
+42.5%
12% stage 1 growth, 11% discount
Bull
$142.27
+100.0%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.8%
11.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
19.1x
Market is pricing in (growth)
8.4%
vs 11.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$75.00
Divergence from AlphaVal
35%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $101.40 per share.
Warnings
Wall Street's average price target is $75.00 (from 20 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions