BFAM
Bright Horizons Family Solutions Inc.
$75.77
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 7.7% below fair value
You pay
$75.77
Bear
$48.53
Fair
$82.06
Bull
$116.41
Bear
$48.53
-35.9%
7% stage 1 growth, 11% discount
Fair
$82.06
+8.3%
12% stage 1 growth, 11% discount
Bull
$116.41
+53.6%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
24.0x
Market is pricing in (growth)
11.4%
vs 11.7% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $94.71 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $82.06 per share.
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