Asset Breakdown
4.1 B
Assets Non Current
1.9 B
Goodwill
1.4 B
Current Assets
| Total Assets | 6.59 Billion | |
| Current Assets | 1.42 Billion | |
| Assets Non Current | 4.06 Billion | |
| Goodwill | 1.93 Billion | |
| Tax Assets | 105.59 Million |
Continue to hold Bright (USA Stocks:BEDU) based on its current debt obligations?
 | By Vlad Skutelnik | Macroaxis Story |
Bright Scholar Education, a prominent player in the Education & Training Services industry, offers a compelling opportunity for long-term investment. Despite a challenging financial year marked by a loss before tax of $60.8 million, the company's robust financial structure, characterized by a total stockholder equity of $2.2 billion, provides a solid foundation for future growth. With total liabilities standing at $3.1 billion, the company's leverage is substantial, but manageable given its significant end period cash flow of $857.8 million. This cash flow, coupled with a change in working capital of $34.6 million, has enabled the company to maintain its operations and invest in its growth, despite a negative free cash flow of $44.1 million. The company's total current assets amount to $1.2 billion, providing a buffer against its short-term debt of $255.9 million. Moreover, Bright Scholar Education's property, plant, and equipment assets are valued at $1.9 billion, further strengthening its balance sheet. The company's stock, traded on the NYSE, is backed by a strong equity base, including $1.7 billion in other stockholder equity and retained earnings of $471.4 million. Despite the negative income and a valuation hype value of 1.12, the company's potential upside price of 5.31 and a dividend yield of 0.14 suggest that the stock is primed for long-term investment. As of the latest update on August 4, 2023, Bright Scholar Education remains a resilient player in the Consumer Defensive category, demonstrating the potential to weather financial storms and deliver value to its shareholders. Bright Scholar Education is set to announce its earnings today. The company's Price to Book Value has remained relatively stable over the past year, with a reported value of 0.35 in 2022. The Price to Sales Ratio is projected to increase to 0.35 in 2023, while the Free Cash Flow is expected to decrease to $46.6 million in the same year. As many baby boomers remain indifferent towards the diversified consumer services sector, it's worth considering Bright Scholar Education as a unique investment choice for millennials. So, what can Bright Scholar shareholders expect in September?
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Reviewed by Gabriel Shpitalnik
Bright Scholar Education Holdings Ltd. (BEDU) offers a compelling long-term investment opportunity, particularly when viewed from a leverage perspective. Despite the company's net loss of 165.2M, the education and training services provider has a substantial asset base, with total assets valued at 5.5B. The firm's long-term debt stands at a manageable 633K, suggesting a healthy debt-to-asset ratio and a robust financial structure that can weather market volatility. Bright Scholar's mean deviation of 3.03 and kurtosis of 3.14 further underline the company's stability, indicating a lower likelihood of extreme price fluctuations. Furthermore, the company has demonstrated an ability to generate substantial gross profit, with a recent figure of 478.1M. Therefore, investors seeking to leverage their positions should consider Bright Scholar Education as a potential long-term investment.
Rigorous look
Bright Scholar Education currently holds $1.69 billion in liabilities with a Debt to Equity (D/E) ratio of 1.43. This ratio is approximately average when compared to similar companies. The entity's current ratio stands at 0.87, suggesting it has a negative working capital and may struggle to meet financial obligations when they are due. Debt can aid Bright Scholar until it encounters difficulties in paying it off, either with new capital or free cash flow. Consequently, Bright Scholar's shareholders could end up with nothing if the company fails to meet its legal obligations to repay debt. However, a more common scenario is when companies like Bright Scholar Education issue additional shares at discounted prices, thereby diluting existing shareholders. In this context, debt can be an effective tool for Bright Scholar to invest in growth at high rates of return. When assessing Bright Scholar's use of debt, it should always be considered in conjunction with cash and equity.Bright Scholar financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Bright Scholar, including all of Bright Scholar's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Bright Scholar assets, the company is considered highly leveraged. Understanding the composition and structure of overall Bright Scholar debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.Understanding Bright Total Liabilities
Bright Scholar Education liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Bright Scholar Education has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Bright Scholar balance sheet include debt obligations and money owed to different Bright Scholar vendors, workers, and loan providers. Below is the chart of Bright short long-term liabilities accounts currently reported on its balance sheet. You can use Bright Scholar Education financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Bright Scholar's Liquidity
Bright Scholar financial leverage refers to using borrowed capital as a funding source to finance Bright Scholar Education ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Bright Scholar financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Bright Scholar's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Bright Scholar's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Bright Scholar's total debt and its cash.
Is Bright Scholar valued wisely by the market?
The firm reported the previous year's revenue of 1.71 B. Net Loss for the year was (119.7 M) with profit before overhead, payroll, taxes, and interest of 478.11 M.
Bright Scholar Education, a prominent player in the Education & Training Services industry, is shaping up to be a lucrative long-term investment opportunity. Despite a challenging fiscal year ending in August, with a net interest income loss of 127.8M and a free cash flow of -44.1M, the company's financial health remains robust. The company's total assets stand at a remarkable 5.5B, with stockholder equity accounting for 2.2B of this figure. Bright Scholar's shares are largely held by institutions, with 27.11% of shares owned by such entities.This institutional backing underscores the company's stability and potential for growth. The company's price to earnings ratio stands at 32.65X, indicating a relatively high level of investor confidence. Despite a current ratio of 0.89X, indicating a slight liquidity risk, the company's cash per share is a healthy 67.23X. This, coupled with an end period cash flow of 857.8M, suggests that Bright Scholar has the financial resilience to weather short-term challenges. However, potential investors should be aware of the company's beta of 0.44, indicating lower volatility compared to the market, and a probability of bankruptcy at 47.96%. Despite these risks, Bright Scholar's strong financial position, bolstered by a total revenue of 1.7B, makes it a promising candidate for long-term investment. .
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