As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at education services stocks, starting with Bright Horizons (NYSE:BFAM).
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 Q4. As a group, revenues beat analysts’ consensus estimates by 3.7% while next quarter’s revenue guidance was in line.
While some education services stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.4% since the latest earnings results.
Best Q4: 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 $674.1 million, up 9.5% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts’ adjusted operating income estimates but full-year revenue guidance slightly missing analysts’ expectations.
Bright Horizons Total Revenue
Interestingly, the stock is up 9.1% since reporting and currently trades at $129.66.
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 $311.5 million, up 2.9% year on year, in line with analysts’ expectations. The business performed better than its peers, but it was unfortunately a mixed quarter with a decent beat of analysts’ EBITDA estimates but a miss of analysts’ international students estimates.
Strategic Education Total Revenue
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 17.8% since reporting. It currently trades at $80.53.
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 $423.4 million, up 3.4% year on year, exceeding analysts’ expectations by 2.2%. Still, it was a weak quarter as it posted full-year revenue guidance missing analysts’ expectations.
Laureate Education delivered the weakest full-year guidance update in the group. The stock is flat since the results and currently trades at $20.
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 $119.4 million, up 16.4% year on year. This result topped analysts’ expectations by 6.9%. Overall, it was a very strong quarter as it also produced full-year EBITDA guidance exceeding analysts’ expectations.
Lincoln Educational achieved the highest full-year guidance raise among its peers. The stock is up 12.1% since reporting and currently trades at $18.03.
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE:ATGE) is a global provider of workforce solutions and educational services.
Adtalem reported revenues of $447.7 million, up 13.9% year on year. This print beat analysts’ expectations by 4.7%. It was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $102.31.
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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