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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 8% on average since the latest earnings results.
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 $204.3 million, up 15.1% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
"We delivered another strong quarter, driven by consistent execution and the strength of our model," said Jerome Grant, CEO of Universal Technical Institute, Inc.
Unsurprisingly, the stock is down 8.7% since reporting and currently trades at $30.50.
Is now the time to buy Universal Technical Institute? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: 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 $247.5 million, up 8.8% year on year, outperforming analysts’ expectations by 2.8%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income estimates and EPS guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 22.9% since reporting. It currently trades at $211.72.
Is now the time to buy Grand Canyon Education? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $209.6 million, up 25.7% year on year, exceeding analysts’ expectations by 1.3%. It was a satisfactory quarter as it also posted a decent beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Interestingly, the stock is up 19.5% since the results and currently trades at $34.43.
Read our full analysis of Perdoceo Education’s results here.
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 $524.2 million, up 5% year on year. This print surpassed analysts’ expectations by 1.5%. It was a very strong quarter as it also put up full-year revenue guidance beating analysts’ expectations and an impressive beat of analysts’ adjusted operating income estimates.
Laureate Education had the weakest full-year guidance update among its peers. The stock is up 28.7% since reporting and currently trades at $29.40.
Read our full, actionable report on Laureate Education here, it’s free for active Edge members.
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 $321.5 million, up 2.9% year on year. This number missed analysts’ expectations by 0.6%. Taking a step back, it was a satisfactory quarter as it also logged a decent beat of analysts’ EBITDA estimates.
Strategic Education had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 1.6% since reporting and currently trades at $80.84.
Read our full, actionable report on Strategic Education here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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