The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Universal Technical Institute (NYSE:UTI) and the rest of the education services stocks fared in Q2.
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.
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. However, education services stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
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. This print exceeded analysts’ expectations by 2.7%. Overall, 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.
"Our momentum persisted as we moved into the second half of the fiscal year," said Jerome Grant, CEO of Universal Technical Institute, Inc.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $17.45.
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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. It was a strong quarter for the company with a solid beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 19.6% since reporting. It currently trades at $141.47.
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.
Interestingly, the stock is up 6.9% since the results and currently trades at $12.45.
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 20.1% since reporting and currently trades at $96.50.
Grand Canyon Education (NASDAQ:LOPE) Founded in 1949, Grand Canyon Education (NASDAQ:LOPE) is an educational services provider known for its operation at Grand Canyon University.
Grand Canyon Education reported revenues of $227.5 million, up 8% year on year, surpassing analysts’ expectations by 1.7%. Zooming out, it was a decent quarter for the company with an impressive beat of analysts’ operating margin estimates but full-year revenue guidance missing analysts’ expectations.
Grand Canyon Education had the weakest full-year guidance update among its peers. The stock is down 1.6% since reporting and currently trades at $145.01.
This content was originally published on Stock Story
