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BrightSpring Health Services (BTSG): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Oct 30, 2026; rules v1.1
BrightSpring Health Services (BTSG): 1 rule of 10 triggered on the filings to Sep 30, 2026: FCF growth = the business improved. 1 to review; 2 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
FCF growth = the business improved Triggered · severity medium · confidence medium
Free cash flow rose $452M, from −$57M to $395M, but working capital released $252M more cash than the year before: 56% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $215M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 34.67 a share (price 65.86); 80% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from -5.86 to 75.21; across every method the research ran the range is -412 to 3,244. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Triggered severity medium · confidence medium
Free cash flow rose $452M, from −$57M to $395M, but working capital released $252M more cash than the year before: 56% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $215M.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $24M |
| Operating cash flow | $490M |
| Capex, year before | $81M |
| Capex | $95M |
| Free cash flow, year before | −$57M |
| Free cash flow | $395M |
| Change in FCF | $452M |
| Change in capex | $15M |
| Working capital: change in its cash contribution | $252M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | $252M |
| Share of the increase that need not repeat | +55.7% |
| Operating cash flow before working capital: change | 214864000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 0.5% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $70M |
| Revenue | $12.9B |
| SBC / revenue | +0.5% |
| Buybacks | $43M |
| Buybacks / SBC | 0.6 |
| Diluted shares, year before | 193.0M shares |
| Diluted shares | 219.8M shares |
| Diluted shares: change | +13.9% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 20% against revenue 26% in Q3 2026; DSO 26 against a median of 27: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 2026 |
| Revenue, year over year | +26.4% |
| Receivables, year over year | +20.1% |
| Quarter before | Q2 2026 |
| Revenue y/y, quarter before | +23.1% |
| Receivables y/y, quarter before | +17.1% |
| Days sales outstanding | 25.7 |
| DSO, median of eight quarters | 27.4 |
| Receivables | $1.2B |
| Revenue | $4.2B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 2026 (receivables and revenue) · Q3 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$52M comes due within a year, 23.1× covered by cash and investments of $718M plus $492M of free cash flow.
The figures and how they are read
| Cash and investments | $718M |
| Debt | $2.2B |
| Net debt | $1.5B |
| Due within a year | $52M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $492M |
| Cash plus free cash flow | $1.2B |
| Coverage of what is due | 23.1 |
| Due in the second year | $32M |
| Balance sheet date | 2026-09-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY2025 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 78% and net income rose 79% in Q3 2026; the share count rose 1.0%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 2026 |
| Quarter before | Q3 2025 |
| EPS, year before | $0.26 |
| EPS | $0.46 |
| Net income, year before | $56M |
| Net income | $100M |
| Diluted shares, year before | 218.0M shares |
| Diluted shares | 220.2M shares |
| EPS growth | +77.7% |
| Net income growth | +79.3% |
| Diluted shares: change | +1.0% |
| eps from profit | $0.20 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 2026 (net income, diluted shares, EPS) · Q3 2025 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Insufficient data
4 fiscal years of net income on file; a cycle needs five
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 34.67 a share (price 65.86); 80% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from -5.86 to 75.21; across every method the research ran the range is -412 to 3,244. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 34.67 |
| price | 65.86 |
| terminal value share | +80.3% |
| swing by input | Operating margin / ±3 pts / -5.86 / 75.21; WACC / ±1 pt / 28.79 / 42.66; Revenue growth (each year) / ±5 pts / 28.56 / 41.85; Working capital per $ of growth / ±10 pts / 28.45 / 40.9 |
| range all methods | -411.6; 3244.42 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → BrightSpring Health Services: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.