Bright Horizons Family Solutions (NYSE:BFAM) and BGSF (NYSE:BGSF) Critical Analysis

Bright Horizons Family Solutions (NYSE:BFAM) and BGSF (NYSE:BGSF) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Valuation & Earnings

This table compares Bright Horizons Family Solutions and BGSF”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bright Horizons Family Solutions	$2.87 billion	2.03	$140.19 million	$3.48	29.69
BGSF	$272.50 million	0.18	-$3.34 million	($1.03)	-4.37

Bright Horizons Family Solutions has higher revenue and earnings than BGSF. BGSF is trading at a lower price-to-earnings ratio than Bright Horizons Family Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bright Horizons Family Solutions and BGSF’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bright Horizons Family Solutions	6.98%	17.07%	5.99%
BGSF	-6.32%	-13.16%	-7.20%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bright Horizons Family Solutions and BGSF, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bright Horizons Family Solutions	1	3	3	0	2.29
BGSF	1	1	1	1	2.50

Bright Horizons Family Solutions presently has a consensus target price of $128.71, indicating a potential upside of 24.57%. BGSF has a consensus target price of $9.00, indicating a potential upside of 100.00%. Given BGSF’s stronger consensus rating and higher probable upside, analysts plainly believe BGSF is more favorable than Bright Horizons Family Solutions.

Risk and Volatility

Bright Horizons Family Solutions has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, BGSF has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

37.2% of BGSF shares are held by institutional investors. 1.2% of Bright Horizons Family Solutions shares are held by insiders. Comparatively, 8.0% of BGSF shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Bright Horizons Family Solutions beats BGSF on 10 of the 15 factors compared between the two stocks.

About Bright Horizons Family Solutions

Bright Horizons Family Solutions Inc. provides early education and childcare, back-up care, educational advisory, and other workplace solutions services for employers and families in the United States, Puerto Rico, the United Kingdom, the Netherlands, Australia, and India. The company operates in three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory and Other Services. The Full Service Center-Based Child Care segment offers traditional center-based child care and early education, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, and self-sourced reimbursed care services through child care centers, school-age campuses, and in-home caregivers, as well as the back-up care network. The Educational Advisory and Other Services segment offers tuition assistance and student loan repayment program administration, workforce education, and related educational consulting services, as well as college admissions and college financial advisory services. The company was formerly known as Bright Horizons Solutions Corp. and changed its name to Bright Horizons Family Solutions Inc. in July 2012. Bright Horizons Family Solutions Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.

About BGSF

BGSF, Inc., together with its subsidiaries, provides consulting, managed services, and professional workforce solutions in the United States. It operates in two segments, Property Management and Professional. The Property Management segment offers office and maintenance field talent to various apartment communities and commercial buildings. The Professional segment provides skilled IT professionals in SAP, Workday, Peoplesoft, Hyperion, Oracle, One Stream, cyber, project management, management services, and other IT workforce solutions. This segment also offers finance, accounting, legal, human resource, and related support personnel. It serves its products to fortune 500 companies, and medium and small companies, as well as consulting companies. The company was formerly known as BG Staffing, Inc. and changed its name to BGSF, Inc. in February 2021. BGSF, Inc. was incorporated in 2007 and is based in Plano, Texas.