BrightSpring Health Services has been on fire lately. In the past six months alone, the company’s stock price has rocketed 87%, reaching $38.33 per share. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.
Is now still a good time to buy BTSG? Or are investors being too optimistic? Find out in our full research report, it’s free.
Why Does BTSG Stock Spark Debate?
Founded in 1974, BrightSpring Health Services (NASDAQ:BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.
Two Positive Attributes:
1. Skyrocketing Revenue Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, BrightSpring Health Services’s 17.9% annualized revenue growth over the last five years was impressive. Its growth beat the average healthcare company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
BrightSpring Health Services’s full-year EPS grew at an astounding 15.7% compounded annual growth rate over the last four years, better than the broader healthcare sector.
One Reason to be Careful:
Mediocre Free Cash Flow Margin Limits Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
BrightSpring Health Services has shown mediocre cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 1.3%, subpar for a healthcare business.
Final Judgment
BrightSpring Health Services has huge potential even though it has some open questions, and after the recent surge, the stock trades at 30.5× forward P/E (or $38.33 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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