BrightView (BV)

Landscaping service company BrightView (NYSE:BV) missed Wall Street’s revenue expectations in Q2 CY2025, with sales falling 4.1% year on year to $708.3 million. On the other hand, the company’s outlook for the full year was close to analysts’ estimates with revenue guided to $2.71 billion at the midpoint. Its non-GAAP profit of $0.30 per share was 10.7% below analysts’ consensus estimates.

Company Overview

An official field consultant for Major League Baseball, BrightView (NYSE:BV) offers landscaping design, development, and maintenance.

Many facility services are non-discretionary (office building bathrooms need to be cleaned), recurring, and performed through contracts. This makes for more predictable and stickier revenue streams. However, COVID changed the game regarding commercial real estate, and office vacancies remain high as hybrid work seems here to stay. This is a headwind for demand, and facility services companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact commercial construction projects that drive incremental demand for these companies’ services.

Competitors offering similar products include Scotts Miracle-Gro (NYSE:SMG), SiteOne (NYSE:SITE), and TruGreen (private).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, BrightView’s 2.7% annualized revenue growth over the last five years was sluggish. This fell short of our benchmarks and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. BrightView’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.7% annually.

This quarter, BrightView missed Wall Street’s estimates and reported a rather uninspiring 4.1% year-on-year revenue decline, generating $708.3 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 2.7% over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.

For industrials businesses, cost of sales is usually comprised of the direct labor, raw materials, and supplies needed to offer a product or service. These costs can be impacted by inflation and supply chain dynamics in the short term and a company’s purchasing power and scale over the long term.

BrightView has bad unit economics for an industrials company, giving it less room to reinvest and develop new offerings. As you can see below, it averaged a 24.2% gross margin over the last five years. Said differently, BrightView had to pay a chunky $75.84 to its suppliers for every $100 in revenue.

This quarter, BrightView’s gross profit margin was 24.1%, in line with the same quarter last year. On a wider time horizon, the company’s full-year margin has remained steady over the past four quarters, suggesting its input costs (such as raw materials and manufacturing expenses) have been stable and it isn’t under pressure to lower prices.

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

BrightView was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.9% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

On the plus side, BrightView’s operating margin rose by 2.2 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q2, BrightView generated an operating margin profit margin of 8.1%, up 1.5 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for BrightView, its EPS declined by 2.5% annually over the last five years while its revenue grew by 2.7%. We can see the difference stemmed from higher interest expenses or taxes as the company actually improved its operating margin and repurchased its shares during this time.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

BrightView’s two-year annual EPS growth of 8.9% was decent and topped its two-year revenue performance.

We can take a deeper look into BrightView’s earnings quality to better understand the drivers of its performance. BrightView’s operating margin has expanded by 1.4 percentage points over the last two years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, BrightView reported adjusted EPS at $0.30, down from $0.32 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects BrightView’s full-year EPS of $0.87 to grow 4.2%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

BrightView has shown weak cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 4.7%, subpar for an industrials business.

Taking a step back, an encouraging sign is that BrightView’s margin expanded by 2.3 percentage points during that time. We have no doubt shareholders would like to continue seeing its cash conversion rise as it gives the company more optionality.

BrightView’s free cash flow clocked in at $159.4 million in Q2, equivalent to a 22.5% margin. This result was good as its margin was 18.3 percentage points higher than in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

BrightView historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 2.6%, lower than the typical cost of capital (how much it costs to raise money) for industrials companies.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, BrightView’s ROIC increased by 2.7 percentage points annually over the last few years. This is a good sign, and we hope the company can continue improving.

BrightView reported $79.1 million of cash and $871.3 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $344 million of EBITDA over the last 12 months, we view BrightView’s 2.3× net-debt-to-EBITDA ratio as safe. We also see its $27.8 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see BrightView provide full-year EBITDA guidance that slightly beat analysts’ expectations. On the other hand, its EPS missed and its revenue fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock remained flat at $16.28 immediately after reporting.

Updated: November 13, 2025 at 10:39 PM EST

Before making an investment decision, investors should account for BrightView’s business fundamentals and valuation in addition to what happened in the latest quarter.

We cheer for all companies making their customers lives easier, but in the case of BrightView, we’ll be cheering from the sidelines. First off, its revenue growth was weak over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its expanding operating margin shows the business has become more efficient, the downside is its relatively low ROIC suggests management has struggled to find compelling investment opportunities. On top of that, its projected EPS for the next year is lacking.

BrightView’s P/E ratio based on the next 12 months is 15.1x. While this valuation is reasonable, we don’t see a big opportunity at the moment. There are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $18.69 on the company (compared to the current share price of $12.23).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.