BrightSpring Health Services, Inc. (NASDAQ: BTSG)

Sector: Healthcare Industry: Health Information Services CIK: 0001865782
Market Cap 7.70 Bn
P/B 4.23
P/E 59.42
P/S 0.62
ROIC (Qtr) 4.88
Div Yield % 0.00
Rev 1y % (Qtr) 28.17
Total Debt (Qtr) 2.70 Bn
Debt/Equity (Qtr) 1.48

About

Price action

Investment thesis

Bull case

  • Robust free cash flow of 276.09M exceeds capital expenditure of 73.13M by 3.78x, indicating strong organic growth funding capability.
  • Tangible assets of 3.16B provide robust 6.31x coverage of other current liabilities 500.66M, indicating strong asset backing.
  • Operating cash flow of 349.22M provides strong 33.45x coverage of tax liabilities 10.44M, showing excellent fiscal position.
  • Operating cash flow of 349.22M fully covers other non-current liabilities 74M by 4.72x, showing strong long-term stability.
  • Cash reserves of 140.34M provide comfortable 13.44x coverage of tax obligations 10.44M, showing strong fiscal management.

Bear case

  • Operating cash flow of 349.22M barely covers its investment activities of (86.97M), with a coverage ratio of -4.02, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 140.34M against inventory of 639.20M, the 0.22 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 140.34M provide limited coverage of acquisition spending of (8.35M), which is -16.81x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 325.13M show weak coverage of depreciation charges of 179.63M, with a 1.81 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 276.09M represents just -1.69x of debt issuance (163.08M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Health Information Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TEM Tempus AI, Inc. 45.63 Bn -223.83 41.29 1.34 Bn
2 GEHC GE HealthCare Technologies Inc. 38.75 Bn 19.85 2.19 10.28 Bn
3 VEEV Veeva Systems Inc 37.30 Bn 43.36 12.11 0.09 Bn
4 DOCS Doximity, Inc. 7.81 Bn 30.87 12.57 0.01 Bn
5 BTSG BrightSpring Health Services, Inc. 7.70 Bn 59.42 0.62 2.70 Bn
6 HQY Healthequity, Inc. 7.32 Bn 38.14 5.67 1.03 Bn
7 WAY Waystar Holding Corp. 5.00 Bn 44.97 4.81 1.25 Bn
8 PRVA Privia Health Group, Inc. 2.79 Bn 153.67 1.37 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.71 2.77
EV to Cash from Ops. EV/CFO 29.61 -10.86
EV to Debt EV to Debt 3.83 161.93
EV to EBIT EV/EBIT 31.81 -106.48
EV to EBITDA EV/EBITDA 23.20 4.22
EV to Free Cash Flow [EV/FCF] EV/FCF 37.46 7.46
EV to Market Cap EV to Market Cap 1.34 -14.93
EV to Revenue EV/Rev 0.83 1.76
Price to Book Value [P/B] P/B 4.23 10.57
Price to Earnings [P/E] P/E 59.42 147.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -8.65
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 5.00
Dividend per Basic Share Div per Share (Qtr) 0.00 0.04
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.57
Interest Coverage Int. cover (Qtr) 1.87 -584.72
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 11.29 -24.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 290.14 172.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -1.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 269.28 -17.73
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 38.76 39.85
EBIT Growth (1y) % EBIT 1y % (Qtr) 120.03 -38.83
EBT Growth (1y) % EBT 1y % (Qtr) 290.18 -4.52
EPS Growth (1y) % EPS 1y % (Qtr) 360.00 2.60
FCF Growth (1y) % FCF 1y % (Qtr) 2,003.40 -48.57
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 17.79 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.05 0.66
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.09 1.87
Current Ratio Curr Ratio (Qtr) 1.79 3.27
Debt to Equity Ratio Debt/Equity (Qtr) 1.48 -0.43
Interest Cover Ratio Int Coverage (Qtr) 1.87 -584.72
Times Interest Earned Times Interest Earned (Qtr) 1.87 -584.72
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.10 -435.80
EBIT Margin % EBIT Margin % (Qtr) 2.62 -464.70
EBT Margin % EBT Margin % (Qtr) 1.22 -461.74
Gross Margin % Gross Margin % (Qtr) 12.30 44.03
Net Profit Margin % Net Margin % (Qtr) 1.00 -468.01