Q3 Earnings Highs And Lows: Lincoln Educational (NASDAQ:LINC) Vs The Rest Of The Education Services Stocks
As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the education services industry, including Lincoln Educational (NASDAQ:LINC) and its peers.
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 Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 6.2% on average since the latest earnings results.
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 $114.4 million, up 14.8% year on year. This print exceeded analysts’ expectations by 3.3%. Overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance topping analysts’ expectations.
“Lincoln’s third quarter performance illustrates how well our team is serving America’s growing interest in educational alternatives to a traditional four-year college degree while helping employers fill their workforce skills gap,” said Scott Shaw, President & CEO.
Lincoln Educational Total Revenue
Unsurprisingly, the stock is down 7.6% since reporting and currently trades at $14.98.
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 $306 million, up 7% year on year, outperforming analysts’ expectations by 1.5%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Strategic Education Total Revenue
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.5% since reporting. It currently trades at $94.99.
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 $719.1 million, up 11.4% year on year, exceeding analysts’ expectations by 0.8%. Still, it was a decent quarter as it posted full-year revenue guidance meeting analysts’ expectations.
Bright Horizons delivered the weakest full-year guidance update in the group. As expected, the stock is down 13.8% since the results and currently trades at $114.49.
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 $417.4 million, up 13.2% year on year. This result beat analysts’ expectations by 5%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.
Adtalem scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 22.5% since reporting and currently trades at $91.85.
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 $169.8 million, down 5.6% year on year. This print topped analysts’ expectations by 3.2%. It was a strong quarter as it also produced EPS guidance for next quarter beating analysts’ expectations and a decent beat of analysts’ EPS estimates.
Perdoceo Education had the slowest revenue growth among its peers. The stock is up 6.1% since reporting and currently trades at $26.38.
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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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