Q3 Earnings Outperformers: Perdoceo Education (NASDAQ:PRDO) And The Rest Of The Education Services Stocks
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 Perdoceo Education (NASDAQ:PRDO) 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 Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
Luckily, education services stocks have performed well with share prices up 10.1% on average since the latest earnings results.
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 $169.8 million, down 5.6% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was a strong quarter for the company with EPS guidance for next quarter beating analysts’ expectations.
"Operating performance for the quarter was ahead of our expectations as both academic institutions continued to experience strong student retention and engagement through the quarter,” said Todd Nelson, President and Chief Executive Officer.
Perdoceo Education Total Revenue
Perdoceo Education delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 9.5% since reporting and currently trades at $27.21.
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 an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
Strategic Education Total Revenue
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $96.99.
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 inline with analysts’ expectations.
Bright Horizons delivered the weakest full-year guidance update in the group. As expected, the stock is down 13.6% since the results and currently trades at $114.81.
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 $196.4 million, up 15.3% year on year. This number beat analysts’ expectations by 2.7%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EPS estimates and a decent beat of analysts’ new students estimates.
Universal Technical Institute delivered the fastest revenue growth among its peers. The stock is up 32.5% since reporting and currently trades at $26.38.
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 $238.3 million, up 7.4% year on year. This print came in 0.6% below analysts' expectations. Aside from that, it was a satisfactory quarter as it also produced a solid beat of analysts’ adjusted operating income estimates but a miss of analysts’ students estimates.
Grand Canyon Education had the weakest performance against analyst estimates among its peers. The stock is up 6.7% since reporting and currently trades at $170.89.
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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