Bread Financial Holdings Inc (BFH, Financial), a prominent player in the credit services industry, has experienced a notable fluctuation in its stock price recently. With a current market capitalization of $2.23 billion and a stock price of $44.96, the company has seen a 2.34% decrease over the past week but a significant 14.90% increase over the past three months. Currently, the stock is deemed Fairly Valued, with a GF Value of $41.33, compared to $48.8 three months ago when it was considered Modestly Undervalued.
Overview of Bread Financial Holdings Inc
Bread Financial Holdings Inc, operating in the credit services sector, is known for its robust offerings in private label and co-branded credit cards, loyalty programs, and marketing services. The company has evolved from the credit card processing unit of JCPenney and the credit card bank business of The Limited. Today, Bread Financial's core financial unit revolves around its credit card business, which collaborates with retailers to market its products effectively. Additionally, the company maintains a minority interest in its LoyaltyOne division, which manages a major airline miles loyalty program in Canada and provides marketing services to grocery chains across Europe and Asia.
Assessing Profitability
Bread Financial boasts a Profitability Rank of 7/10, indicating robust profitability metrics. The company's Return on Equity (ROE) stands at 13.88%, outperforming 77.04% of 514 companies in the industry. Its Return on Assets (ROA) is 1.79%, better than 50.83% of 539 companies. Impressively, Bread Financial has maintained profitability for the past 10 years, surpassing 99.81% of its peers.
Growth Trajectory and Challenges
The company's Growth Rank is currently at 3/10. Over the past three years, Bread Financial has achieved a 7.70% revenue growth rate per share, which is better than 48.98% of 488 companies. However, its five-year revenue growth rate per share shows a decline of 1.30%. Looking ahead, the estimated total revenue growth rate for the next three to five years is projected at -1.70%, positioning Bread Financial better than only 1.22% of 82 companies. Despite these challenges, the company has seen a 40.90% growth in EPS without NRI over the past three years, significantly outperforming 79.09% of 397 companies.
Key Shareholders
Notable investors in Bread Financial include Richard Pzena (Trades, Portfolio), holding 704,743 shares (1.42% share percentage), HOTCHKIS & WILEY with 330,080 shares (0.67% share percentage), and Steven Cohen (Trades, Portfolio), who owns 255,276 shares (0.51% share percentage).
Competitive Landscape
Bread Financial operates in a competitive landscape with key players such as Upstart Holdings Inc (UPST, Financial) with a market cap of $2.09 billion, Federal Agricultural Mortgage Corp (AGM.A, Financial) valued at $1.85 billion, and Lufax Holding Ltd (LU, Financial) with a market cap of $1.33 billion. These companies represent the closest market capitalization within the same industry, providing a clear picture of Bread Financial's competitive environment.
Conclusion
In conclusion, Bread Financial Holdings Inc has demonstrated a strong market presence with its recent stock performance and solid profitability metrics. Despite facing growth challenges, the company's strategic positioning and robust profitability suggest a resilient business model. Investors and stakeholders will continue to watch its progress closely, especially in terms of how it navigates the competitive pressures and growth headwinds in the future.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
