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Core Viewpoint - JPMorgan has identified 47 top stock picks for 2026 that are expected to outperform the market significantly [1] Group 1 - The list includes stocks that analysts believe will "crush the market" in 2026 [1] - The selection reflects JPMorgan's strategic insights into market trends and potential high-growth sectors [1] - Analysts have conducted thorough research to identify these stocks based on various performance metrics [1]

Brown Brothers Harriman, an investment management company, released its Q3 2025 investor letter for the BBH Select Series - Mid Cap Fund. A copy of the same can be downloaded here. In the quarter, the fund decreased by -0.9% on a total return basis compared to the Russell Midcap Index’s 5.3% return. The Fund has decreased by a total return of -1.8%, YTD, compared to 10.4% for the Index. The third quarter experienced a boost in the low-quality rally that started late last year and gained momentum throughout ...

Core Viewpoint - Bright Horizons Family Solutions Inc. (BFAM) is a leading provider in the child care and early education sector, showing mixed recent performance but significant growth potential and strong financial health [1][2][3]. Performance Summary - BFAM has experienced a modest gain of 1.35% over the past 30 days, indicating steady upward momentum and positive investor sentiment [2][6]. - However, the stock has faced a decline of approximately 8.28% in the last 10 days, which may present a buying opportunity for investors [2][6]. Growth Potential - The stock has an estimated growth potential of 27.26%, suggesting that BFAM is currently undervalued and has room for appreciation [3][6]. - Analysts have set a target price of $127.50 for BFAM, indicating expectations of the stock's fair value and potential upside from current trading levels [5]. Financial Health - BFAM has a Piotroski Score of 8, reflecting robust financials, including profitability, liquidity, and operational efficiency [4][6]. - This strong financial health positions BFAM well for future growth and stability within the competitive child care industry [4].

Financial Performance - For the three months ended September 30, 2025, revenue increased to $802.8 million, a 11.6% year-over-year growth from $719.1 million in 2024[112] - The gross profit margin improved to 27.0% in Q3 2025, compared to 25.2% in Q3 2024, reflecting better cost management[112] - Net income for the three months ended September 30, 2025, was $78.6 million, a 43% increase from $54.9 million in the same period of 2024[112] - The adjusted EBITDA for the nine months ended September 30, 2025, was $364.0 million, up from $298.6 million in the same period of 2024, representing a 22% increase[113] - Revenue for the nine months ended September 30, 2025, increased by $188.0 million, or 9%, to $2.2 billion compared to $2.0 billion for the same period in 2024[131] - Adjusted net income increased by $25.2 million, or 39%, for the three months ended September 30, 2025, primarily due to the increase in adjusted income from operations and lower interest expense[130] - Adjusted net income rose by $50.5 million, or 35%, for the nine months ended September 30, 2025, driven by increased adjusted income from operations and lower interest expenses[146] Revenue Growth - Back-up care revenue grew by 26% year-over-year due to increased utilization, while full service center-based child care revenue increased by 6%[108] - Revenue from back-up care services increased by $51.6 million, or 26%, to $253.4 million for the three months ended September 30, 2025, driven by increased utilization[116] - Revenue from back-up care services for the nine months ended September 30, 2025, increased by $91.7 million, or 20%, compared to the same period in 2024[133] Operational Efficiency - Occupancy rates improved, with 44% of monitored centers being more than 70% enrolled as of September 30, 2025[108] - Income from operations increased by $31.4 million, or 35%, to $120.8 million for the three months ended September 30, 2025, representing 15.1% of revenue[124] - Income from operations rose by $70.8 million, or 36%, to $269.2 million for the nine months ended September 30, 2025, with significant contributions from the back-up care and full service center-based child care segments[141] - Adjusted EBITDA increased by $35.1 million, or 29%, for the three months ended September 30, 2025, primarily due to contributions from both the back-up care and full service center-based child care segments[129] - Adjusted EBITDA increased by $65.4 million, or 22%, for the nine months ended September 30, 2025, primarily due to higher utilization in the back-up care segment and enrollment growth in child care services[145] Cost Management - Cost of services increased by $111.8 million, or 7%, to $1.6 billion for the nine months ended September 30, 2025, primarily due to increased personnel costs[134] - Cost of services in the back-up care segment increased by $37.8 million, or 15%, to $285.3 million for the nine months ended September 30, 2025 compared to the prior year[136] - Selling, General and Administrative (SGA) expenses increased by $16.9 million, or 6%, to $281.4 million for the nine months ended September 30, 2025, consistent at 13% of revenue[139] Tax and Interest Expenses - Income tax expense for the three months ended September 30, 2025, was $30.1 million at an effective tax rate of 28%, compared to $22.9 million at 29% for the same period in 2024[126] - Income tax expense was $64.7 million for the nine months ended September 30, 2025, with an effective tax rate of 27%, compared to $50.0 million and 31% in the prior year[143] - Net interest expense decreased to $33.1 million for the nine months ended September 30, 2025, down from $37.3 million in the same period in 2024, due to lower interest rates and outstanding debt[142] Cash Flow and Investments - Net cash provided by operating activities was $202.8 million for the nine months ended September 30, 2025, a decrease from $216.8 million in the same period in 2024[162] - Cash used in investing activities decreased to $63.5 million for the nine months ended September 30, 2025, compared to $92.7 million in the same period in 2024[163] - The company had net investments of $58.9 million in fixed asset purchases during the nine months ended September 30, 2025, down from $65.3 million in the prior year[164] - Cash used in financing activities was $142.8 million for the nine months ended September 30, 2025, compared to $95.8 million in the same period in 2024[165] Debt and Shareholder Returns - Total debt as of September 30, 2025, was $916.8 million, down from $946.9 million as of December 31, 2024[169] - The blended weighted average interest rate for the term loans and revolving credit facility was 4.30% for the nine months ended September 30, 2025, compared to 4.93% for the same period in 2024[176] - The company authorized a share repurchase program of up to $500 million, with $448.8 million remaining available for future repurchases as of September 30, 2025[159] Strategic Focus - The company remains focused on strategic priorities to enhance service quality and expand its impact on clients and families[110] - The company plans to close additional underperforming centers over the next 12 months to optimize its portfolio[109] Market Risks - Company remains exposed to market risk from interest rate changes and foreign currency exchange rate fluctuations[181] - No material changes in exposure to interest rate or foreign currency exchange rate fluctuations since December 31, 2024[181] Accounting Policies - No material changes to critical accounting policies since December 31, 2024[179] Cash Position - As of September 30, 2025, the company had $116.6 million in cash, compared to $110.3 million as of December 31, 2024, with $82.2 million held in foreign jurisdictions[155] - The company reported a working capital deficit of $386.4 million as of September 30, 2025, up from $283.4 million as of December 31, 2024[157]

Core Viewpoint - The analyst downgraded Bright Horizons Family (BFAM) to a hold rating due to limited upside potential based on its current valuation [1] Company Analysis - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles and long-term growth [1] - The strategy involves purchasing quality companies at a discount to their intrinsic value and holding them to allow for compounding of earnings and shareholder returns [1]

Core Insights - Bright Horizons Family Solutions (BFAM) reported revenue of $802.81 million for the quarter ended September 2025, reflecting an 11.6% increase year-over-year and a surprise of +2.95% over the Zacks Consensus Estimate of $779.84 million [1] - Earnings per share (EPS) for the quarter was $1.57, compared to $1.11 in the same quarter last year, resulting in an EPS surprise of +18.94% against the consensus estimate of $1.32 [1] Financial Performance Metrics - The number of education and child care centers at the end of the period was 1.01 billion, slightly below the estimated 1.02 billion [4] - Revenue from full-service center-based child care was $515.51 million, exceeding the average estimate of $514.29 million, with a year-over-year change of +6% [4] - Revenue from educational advisory and other services reached $33.93 million, surpassing the estimated $32.11 million, marking a +10.4% change year-over-year [4] - Revenue from back-up care was $253.37 million, exceeding the average estimate of $232.56 million, with a significant year-over-year increase of +25.6% [4] - Adjusted income from operations for full-service center-based child care was $20.4 million, slightly above the estimate of $20.22 million [4] - Adjusted income from operations for educational advisory and other services was $8.76 million, significantly higher than the estimated $6.07 million [4] - Adjusted income from operations for back-up care was $95.33 million, compared to the average estimate of $78.99 million, indicating strong performance [4] Stock Performance - Bright Horizons shares have returned -14.2% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Bright Horizons Family Solutions (BFAM) reported quarterly earnings of $1.57 per share, exceeding the Zacks Consensus Estimate of $1.32 per share, and up from $1.11 per share a year ago [1] - The company achieved an earnings surprise of +18.94% and has surpassed consensus EPS estimates in all four quarters over the past year [2] - Revenues for the quarter reached $802.81 million, surpassing the Zacks Consensus Estimate by 2.95%, and increased from $719.1 million year-over-year [3] Earnings Performance - The earnings surprise of +18.94% indicates strong performance relative to expectations, with a previous quarter's earnings of $1.07 also exceeding estimates [2] - The company has consistently outperformed consensus revenue estimates over the last four quarters [3] Stock Performance and Outlook - Bright Horizons shares have declined approximately 16.4% year-to-date, contrasting with the S&P 500's gain of 17.2% [4] - The future performance of the stock will largely depend on management's commentary during the earnings call and the sustainability of the recent earnings results [4][5] Earnings Estimates and Industry Context - Current consensus EPS estimate for the upcoming quarter is $1.12 on revenues of $731.42 million, and for the current fiscal year, it is $4.28 on revenues of $2.91 billion [8] - The Zacks Industry Rank places the Business - Services sector in the bottom 25% of over 250 Zacks industries, which may impact stock performance [9]

Financial Data and Key Metrics Changes - Revenue increased by 12% to $803 million, with adjusted EPS growing by 41% to $1.57, both exceeding expectations [4][12] - Adjusted operating income rose by 39% to $124 million, with operating margins up approximately 300 basis points to 15.5% [12] - Adjusted EBITDA increased by 29% to $156 million, representing an adjusted EBITDA margin of 19% [12] Business Line Data and Key Metrics Changes - Backup Care revenue grew by 26% to $253 million, driven by strong demand during the peak summer season [4][13] - Full-service revenue increased by 6% to $516 million, supported by enrollment growth, tuition increases, and new center openings [7][14] - Education advisory revenue grew by 10% to $34 million, led by the strength of College Coach and an expanded participant base in EdAssist [9][15] Market Data and Key Metrics Changes - Enrollment in centers open for more than one year increased at a low single-digit rate, with average occupancy in the mid-60% range [7][14] - UK full-service business showed enrollment growth and improved demand among working families, contributing positively to the overall segment [8][68] Company Strategy and Development Direction - The company aims to build a more integrated model that aligns delivery, technology, and client partnerships, with Backup Care as a cornerstone of this strategy [11] - Plans to continue investing in Backup Care to expand capacity and deepen personalization, reinforcing its value proposition [6][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to sustain growth in Backup Care, projecting an 18% growth for the year, with expectations for low double-digit growth in the following year [20][22] - The company is upgrading its full-year earnings guidance, expecting revenue of approximately $2.925 billion and adjusted EPS in the range of $4.48 to $4.53 [11][17] Other Important Information - The UK segment is expected to contribute modestly positive earnings in 2025, with ongoing improvements in operational performance [8][68] - The company has generated $203 million in cash from operations and repurchased $105 million of stock [16] Q&A Session Summary Question: Sustainability of Backup Care growth rates - Management noted that while current growth is strong, they expect to return to a sustainable growth rate of 11% to 13% in the following year [20][22] Question: Clarification on enrollment growth - Management indicated that enrollment growth is expected to taper to around 1% for the year, with low single-digit growth being a temporary measure [26][27] Question: Impact of economic conditions on tuition pricing - The company plans to implement an average tuition increase of around 4%, with localized pricing strategies based on demand [33][72] Question: Performance of the UK segment - The UK segment is improving and is expected to contribute positively to margins, although it still trails behind the US business [68] Question: Pricing strategy in relation to wage inflation - Management expressed confidence in maintaining a pricing strategy that outpaces wage inflation, targeting a 100 basis point spread [71][72] Question: Net center openings for next year - The company anticipates being a net closer of centers, with plans to close 5 to 10 centers due to underperformance [74][76]

Core Insights - The article discusses the Q3 earnings release of a company, highlighting its financial performance and key metrics [1] Financial Performance - The company reported significant revenue growth in Q3, with a year-over-year increase of 15% [1] - Net income for the quarter reached $200 million, representing a 10% increase compared to the same period last year [1] - Earnings per share (EPS) rose to $1.50, up from $1.36 in Q3 of the previous year, indicating a 10% growth [1] Operational Highlights - The company expanded its market share in key segments, contributing to the overall revenue increase [1] - Cost management strategies were effective, leading to a reduction in operating expenses by 5% [1] - The company launched new products that received positive market feedback, enhancing its competitive position [1]