As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the education services industry, including Perdoceo Education (NASDAQ:PRDO) and its peers.
A whole industry has emerged to address the problem of rising education costs, offering consumers alternatives to traditional education paths such as four-year colleges. These alternative paths, which may include online courses or flexible schedules, make education more accessible to those with work or child-rearing obligations. However, some have run into issues around the value of the degrees and certifications they provide and whether customers are getting a good deal. Those who don’t prove their value could struggle to retain students, or even worse, invite the heavy hand of regulation.
The 8 education services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.7% below.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and education services stocks have had a rough stretch. On average, share prices are down 5.7% since the latest earnings results.
Perdoceo Education (NASDAQ:PRDO) Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ:PRDO) is an educational services company that specializes in postsecondary education.
Perdoceo Education reported revenues of $166.7 million, down 10.6% year on year. This print exceeded analysts’ expectations by 3.6%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ earnings estimates.
Perdoceo Education scored the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 6.4% since reporting and currently trades at $16.41.
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Best Q2: Universal Technical Institute (NYSE:UTI) Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.
Universal Technical Institute reported revenues of $177.5 million, up 15.8% year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates and a decent beat of analysts’ operating margin estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 6.4% since reporting. It currently trades at $16.41.
Lincoln Educational (NASDAQ:LINC) Established in 1946, Lincoln Educational (NASDAQ:LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Lincoln Educational reported revenues of $102.9 million, up 16.1% year on year, exceeding analysts’ expectations by 2.3%. Still, it was a slower quarter as it posted a miss of analysts’ earnings estimates.
The stock is flat since the results and currently trades at $11.76.
Bright Horizons (NYSE:BFAM) Founded in 1986, Bright Horizons (NYSE:BFAM) is a global provider of child care, early education, and workforce support solutions.
Bright Horizons reported revenues of $670.1 million, up 11.1% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also logged an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.
Bright Horizons had the weakest performance against analyst estimates among its peers. The stock is up 17.3% since reporting and currently trades at $138.67.
Adtalem (NYSE:ATGE) Formerly known as DeVry Education Group, Adtalem Global Education (NYSE:ATGE) is a global provider of workforce solutions and educational services.
Adtalem reported revenues of $409.9 million, up 12.4% year on year. This print beat analysts’ expectations by 2.8%. It was a strong quarter as it also logged a decent beat of analysts’ operating margin estimates and full-year revenue guidance beating analysts’ expectations.
Adtalem achieved the highest full-year guidance raise among its peers. The stock is down 6.7% since reporting and currently trades at $69.64.
This content was originally published on Stock Story
