Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Strategic Education (NASDAQ: STRA) and the best and worst performers in the education services industry.
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 6.4% on average since the latest earnings results.
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 print fell short of analysts’ expectations by 0.6%, but it was still a satisfactory quarter for the company with a decent beat of analysts’ EBITDA estimates.
“We are pleased with our first quarter results driven by continued strength across the Education Technology Services segment and ongoing focus on growth through employer partnerships,” said Karl McDonnell, Chief Executive Officer of Strategic Education.
Strategic Education delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 1.2% since reporting and currently trades at $78.62.
Is now the time to buy Strategic Education? 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 20.6% since reporting. It currently trades at $207.86.
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 22.5% since the results and currently trades at $35.31.
Read our full analysis of Perdoceo Education’s results here.
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 $116.5 million, up 13.2% year on year. This result topped analysts’ expectations by 0.5%. It was a very strong quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
Lincoln Educational achieved the highest full-year guidance raise among its peers. The stock is down 10.3% since reporting and currently trades at $21.30.
Read our full, actionable report on Lincoln Educational here, it’s free for active Edge members.
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 number beat analysts’ expectations by 2%. Overall, it was a very strong quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is down 8.8% since reporting and currently trades at $30.48.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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