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

As of 31 October 2025, the valuation grade for Bright Horizons Family Solutions, Inc. moved from expensive to very expensive. The company is overvalued based on its current financial metrics. The P/E ratio stands at 45, significantly 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 EV to EBITDA ratio of 21.97 also exceeds the peer average of 19.44, indicating a premium valuation compared to its competitors.
In terms of performance, Bright Horizons has underperformed relative to the S&P 500 over multiple periods, with a year-to-date return of -6.51% compared to the S&P 500's 16.30%. This trend continues with a one-year return of -22.40% against the S&P 500's 19.89%, further supporting the conclusion that the stock is overvalued given its lack of performance relative to the broader market.