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Bright Horizons Family Solutions Inc. (BFAM)
Intrinsic Value (DCF)
Current$97.01
→
Intrinsic$45.81
-53%
$22.26$45.81$90.57
Market implies 21% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $97, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $22 → Bull $91. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $60 | $68 | $76 | $86 |
| 10% | $34 | $40 | $46 | $52 |
| 12% | $20 | $24 | $29 | $34 |
| 14% | $11 | $15 | $18 | $22 |
Bull Case
- Bull case ($91) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($22) implies 77% downside at 6% growth, 12% discount
- Price reflects 21% growth expectations vs 8% historical — high bar to clear
- Trading 53% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$259.36M
Year 2$280.11M
Year 3$302.52M
Year 4$326.72M
Year 5$352.86M
Terminal$5.19B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$240.15MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.