Looking back on education services stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Laureate Education (NASDAQ: LAUR) 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 very strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 5% on average since the latest earnings results.
Laureate Education (NASDAQ: LAUR)
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 $236.2 million, down 14.2% year on year. This print exceeded analysts’ expectations by 4.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Eilif Serck-Hanssen, President and Chief Executive Officer, said, “We are pleased to report favorable new enrollment results during the recently completed main intake cycle in Peru and secondary intake cycle in Mexico, further reinforcing the resiliency of our business model. With increased visibility into the remainder of the year, we are tightening the range on our full-year 2025 guidance, raising the mid-point for both Revenue and Adjusted EBITDA. We remain confident in the growing demand for quality higher education in both Mexico and Peru even in a time of economic uncertainty, driven by rising participation rates and the significant wage premium earned by graduates. With our leading brands and strong digital capabilities, we are ideally positioned to capitalize on those growth opportunities. In addition, we remain committed to continuing to return excess capital to shareholders, supported by a strong balance sheet and our cash-accretive business model.”
Laureate Education achieved the biggest analyst estimates beat but had the slowest revenue growth and slowest revenue growth of the whole group. Unsurprisingly, the stock is up 19.8% since reporting and currently trades at $23.99.
Is now the time to buy Laureate Education? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $303.6 million, up 4.6% year on year, outperforming analysts’ expectations by 1%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $80.37.
Is now the time to buy Strategic Education? Access our full analysis of the earnings results here, it’s free.
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 $289.3 million, up 5.3% year on year, exceeding analysts’ expectations by 0.8%. It was a satisfactory quarter as it also posted EPS guidance for next quarter exceeding analysts’ expectations but a miss of analysts’ students estimates.
As expected, the stock is down 8.1% since the results and currently trades at $170.42.
Read our full analysis of Grand Canyon Education’s results here.
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 $207.4 million, up 12.6% year on year. This result surpassed analysts’ expectations by 2.8%. Overall, it was an exceptional quarter as it also put up a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Universal Technical Institute achieved the highest full-year guidance raise among its peers. The stock is up 9% since reporting and currently trades at $32.30.
Read our full, actionable report on Universal Technical Institute here, it’s free.
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 $117.5 million, up 13.7% year on year. This number topped analysts’ expectations by 2%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 9.9% since reporting and currently trades at $22.98.
Read our full, actionable report on Lincoln Educational here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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