Is This Beaten-Down Bullpen Name Still a 'Bright' Idea?
A 39% move between late June and late September, set up high expectations for the company when it delivered its quarterly results last week. Here's what's going on.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
When we added Bright Horizons Family Solutions BFAM to the Pro Portfolio Bullpen in late September as a potential return to office (RTO) play, we noted the shares had made a strong move on the back of more companies enacting stronger RTO policies starting in 2025. As we have discussed with other stocks, the 39% move in BFAM between late June and late September, set up high expectations for the company when it delivered its quarterly results last week.
The company delivered a top and bottom-line beat for its September quarter, but its 2024 revenue guidance of $2.675 billlion-$2.68 billion implies current-quarter revenue of $672 million. While there are seasonal issues tied to the November and December holidays, the rate of year-over-year top-line growth in the current quarter is slower than in the last several. The same goes for the company’s bottom line, and that revelation is what hit BFAM shares last week.
At the same time, we have seen more companies since then announce multiple RTO days. 3M MMM recently announced managers would need to be in the office three days per week while The Washington Post is joining the growing list of companies returning to a full, five-day in-office workweek. Post managers will have to come back starting in early February with the rest of the newsroom's roles returning in June.
We’ll continue to monitor RTO policy announcements, and should we see more folks in the office, more days during the workweek in the coming quarters, we’ll revisit BFAM.
We’ll also be watching Placer.AI’s Office Index, which analyzes foot traffic data from ~1,000 office buildings across the country. The index includes commercial office buildings, not mixed-use buildings that include residential and commercial. The most recent reading for August showed office visits nationwide were 68.8% of August 2019 levels, down from 72.2% in July but that likely reflects summer vacation.
More Pro Portfolio:
- We're Closing Out This High-Flying Position With a Triple-Digit Gain
- Weekly Roundup: A Big Week for the Market, But Caution Lights Are Flashing
- In Case You Missed It: Reports That Held Clues for Our Holdings Amid Busy Week
At the time of publication, TheStreet Pro Portfolio had no positions in any securities mentioned.
