MeritValue

BREAD FINANCIAL HOLDINGS, INC.

BFHdata completeness 88%18 fiscal years on file
The thesis, from the filings

BREAD FINANCIAL HOLDINGS, INC. earns about 44% on invested capital, far above its ~9% cost of capital, and has bought back 5% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $112.77 and $705.09 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.87B1$4.68B2$5.15B3$5.02B3$4.91B3
Net income$801M4$223M5$718M6$277M6$518M6
Operating cash flow$1.54B7$1.85B8$1.99B9$1.86B9$2.09B9
Capital expenditure$84M10$68M10———
Free cash flow (derived)$1.46B7$1.78B8———
Total debt$7.44B11$8.01B12$5.29B13$5.56B14$4.31B14
Cash & equivalents$3.05B15$3.89B16$3.59B17$3.68B17$3.6B17
Diluted shares50.0M50.0M50.0M50.4M47.6M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$698.95
your share of equity
Profit it earned you last year
$108.82
Free cash flow it threw off
—
Debt you’d be carrying
$905.04

10 shares is a claim on $698.95 of net worth that earned you $108.82 last year, against $905.04 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
44% avg · 5y
FY21 17%FY22 9%FY23 30%FY24 66%FY25 98%

It earned about 44% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−5% shares · 5y

Share count is down 5% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 42% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $112.77 and $705.09 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$705.09
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$1.78B
DCF · Growth Exit 5Y
$648.82
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$1.78B
Earnings Power Value
$112.77
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$518M
  • growthAssumed0.0%
Graham Number
$130.87
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $648.82
The three cases
Bear0.0%$519.5
Base5.0%$648.82
Bull10.0%$803.57

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001101215-24-000041 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2022-12-31 · accession 0001101215-25-000031 (InterestAndDividendIncomeOperating)
  3. 10-K · period ending 2023-12-31 · accession 0001101215-26-000016 (InterestAndDividendIncomeOperating)
  4. 10-K · period ending 2021-12-31 · accession 0001101215-24-000041 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001101215-25-000031 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001101215-26-000016 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001101215-24-000041 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001101215-25-000031 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001101215-26-000016 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001101215-23-000049 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2021-12-31 · accession 0001101215-23-000049 (LongTermDebt)
  12. 10-K · period ending 2022-12-31 · accession 0001101215-24-000041 (LongTermDebt)
  13. 10-K · period ending 2023-12-31 · accession 0001101215-25-000031 (LongTermDebt)
  14. 10-K · period ending 2024-12-31 · accession 0001101215-26-000016 (LongTermDebt)
  15. 10-K · period ending 2021-12-31 · accession 0001101215-24-000041 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0001101215-25-000031 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0001101215-26-000016 (CashAndCashEquivalentsAtCarryingValue)