A strong stock as of late has been Bread Financial Holdings (BFH). Shares have been marching higher, with the stock up 8.4% over the past month. The stock hit a new 52-week high of $68.72 in the previous session. Bread Financial has gained 10.5% since the start of the year compared to the 14.3% gain for the Zacks Finance sector and the -7.1% return for the Zacks Financial - Miscellaneous Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on October 23, 2025, Bread Financial reported EPS of $4.02 versus consensus estimate of $2.11 while it beat the consensus revenue estimate by 0.46%.
For the current fiscal year, Bread Financial is expected to post earnings of $10.14 per share on $3.82 in revenues. This represents a 33.42% change in EPS on a -0.46% change in revenues. For the next fiscal year, the company is expected to earn $9.12 per share on $3.95 in revenues. This represents a year-over-year change of -10.09% and 3.27%, respectively.
Valuation Metrics
Bread Financial may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Bread Financial has a Value Score of A. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 6.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.2X. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 9.8X. Additionally, the stock has a PEG ratio of 0.43. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Bread Financial an interesting choice for value investors.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Bread Financial currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Bread Financial passes the test. Thus, it seems as though Bread Financial shares could still be poised for more gains ahead.
How Does BFH Stack Up to the Competition?
Shares of BFH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Community West Bancshares (CWBC). CWBC has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of D.
Earnings were strong last quarter. Community West Bancshares beat our consensus estimate by 7.55%, and for the current fiscal year, CWBC is expected to post earnings of $2.39 per share on revenue of $146.5 million.
Shares of Community West Bancshares have gained 7.7% over the past month, and currently trade at a forward P/E of 11.36X and a P/CF of 16.89X.
The Financial - Miscellaneous Services industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BFH and CWBC, even beyond their own solid fundamental situation.
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Bread Financial Holdings, Inc. (BFH): Free Stock Analysis Report Community West Bancshares (CWBC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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