As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the education services industry, including Laureate Education (NASDAQ:LAUR) 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 solid Q2. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.7% below.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some education services stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.9% since the latest earnings results.
Laureate Education (NASDAQ:LAUR) Founded in 1998 by Douglas L. Becker and based in Miami, Laureate Education (NASDAQ:LAUR) is a global network of higher education institutions.
Laureate Education reported revenues of $499.2 million, up 8% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ earnings estimates and a decent beat of analysts’ operating margin estimates.
Eilif Serck-Hanssen, President and Chief Executive Officer, said, “We are pleased with our solid operating results for the second quarter. Market dynamics remain favorable for the private sector in both our geographies. We continue to deliver strong growth in Mexico, while muted growth in Peru over the past 12 months is expected to pivot to a recovery in the second half of this year. In addition, our strong balance sheet and significant cash flow generation allow for a continued emphasis on returning capital to shareholders.”
Unsurprisingly, the stock is down 3.4% since reporting and currently trades at $15.
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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%. It was a very strong quarter for the company 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 6.8% since reporting. It currently trades at $16.33.
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%. It was a weaker quarter for the company with a miss of analysts’ earnings estimates.
The stock is flat since the results and currently trades at $11.75.
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, in line with analysts’ expectations. Zooming out, it was a strong quarter for the company with a solid beat of analysts’ earnings estimates.
Bright Horizons had the weakest performance against analyst estimates among its peers. The stock is up 19% since reporting and currently trades at $140.71.
Strategic Education (NASDAQ:STRA) Formed through the merger of Strayer Education and Capella Education in 2018, Strategic Education (NASDAQ:STRA) is a career-focused higher education provider.
Strategic Education reported revenues of $312.3 million, up 8.5% year on year, surpassing analysts’ expectations by 1.3%. Taking a step back, it was a strong quarter for the company with a decent beat of analysts’ earnings estimates.
The stock is down 21.4% since reporting and currently trades at $94.90.
This content was originally published on Stock Story
