Vocational education Universal Technical Institute (NYSE: UTI) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 15.1% year on year to $204.3 million. The company expects the full year’s revenue to be around $832.5 million, close to analysts’ estimates. Its GAAP profit of $0.19 per share was 72.7% above analysts’ consensus estimates.

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"We delivered another strong quarter, driven by consistent execution and the strength of our model," said Jerome Grant, CEO of Universal Technical Institute, Inc.

Company Overview

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.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Universal Technical Institute grew its sales at an impressive 21% compounded annual growth rate. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Universal Technical Institute’s annualized revenue growth of 21.6% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

Universal Technical Institute also discloses its number of new students, which reached 5,721 in the latest quarter. Over the last two years, Universal Technical Institute’s new students averaged 30.5% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen.

This quarter, Universal Technical Institute reported year-on-year revenue growth of 15.1%, and its $204.3 million of revenue exceeded Wall Street’s estimates by 2%.

Looking ahead, sell-side analysts expect revenue to grow 8.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Universal Technical Institute’s operating margin has risen over the last 12 months and averaged 8.4% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports mediocre profitability for a consumer discretionary business.

This quarter, Universal Technical Institute generated an operating margin profit margin of 6.9%, up 2.7 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Universal Technical Institute’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q2, Universal Technical Institute reported EPS at $0.19, up from $0.09 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Universal Technical Institute’s full-year EPS of $1.14 to shrink by 10.2%.

Key Takeaways from Universal Technical Institute’s Q2 Results

We were impressed by how significantly Universal Technical Institute blew past analysts’ EPS expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. On the other hand, its number of new students missed. Overall, we think this was still a solid quarter with some key areas of upside. The market seemed to be hoping for more, and the stock traded down 2.1% to $32.70 immediately following the results.

So do we think Universal Technical Institute is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.