Is Bright Horizons Family Solutions, Inc. overvalued or undervalued?

As of 13 February 2025, the valuation grade for Bright Horizons Family Solutions, Inc. has moved from very expensive to expensive, indicating a slight improvement in perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 45, an EV to EBITDA of 21.97, and a PEG ratio of 0.26, which suggests that despite high earnings multiples, the growth expectations are not as aggressive as the valuation implies.
In comparison to peers, Medpace Holdings, Inc. has a more attractive P/E ratio of 20.61 and an EV to EBITDA of 16.82, while Genpact Ltd. shows a fair valuation with a P/E of 14.26. Bright Horizons' high P/E ratio relative to its peers highlights its overvaluation. Additionally, while the company has outperformed the S&P 500 over the past year with a return of 20.01% compared to 10.26%, its long-term performance has lagged significantly behind the index over 5 and 10 years.