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

As of 17 October 2025, the valuation grade for Bright Horizons Family Solutions, Inc. has moved from attractive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, as evidenced by its P/E ratio of 45, which is considerably higher than the peer average of 36.94 for companies like Medpace Holdings, Inc. and Booz Allen Hamilton Holding Corp., which have P/E ratios of 33.13 and 15.81, respectively. Additionally, the Price to Book Value stands at 5.49, and the EV to EBITDA ratio is 21.97, both suggesting that the stock is priced at a premium compared to its peers.
In terms of recent performance, Bright Horizons has underperformed relative to the S&P 500, with a 1-year return of -23.63% compared to the index's 14.08%. This stark contrast reinforces the notion that the stock may be overvalued, as it struggles to deliver positive returns in a rising market. Overall, the combination of high valuation ratios and poor stock performance suggests that investors may want to exercise caution before investing in Bright Horizons Family Solutions, Inc.