Wrapping up Q2 earnings, we look at the numbers and key takeaways for the education services stocks, including Grand Canyon Education (NASDAQ:LOPE) 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 Q2. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.7% below.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and 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.
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 $227.5 million, up 8% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ operating margin estimates but full-year revenue guidance missing analysts’ expectations.
Grand Canyon Education delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 3.3% since reporting and currently trades at $142.53.
Is now the time to buy Grand Canyon Education? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $177.5 million, up 15.8% year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates and a decent beat of analysts’ operating margin estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.4% since reporting. It currently trades at $16.76.
Is now the time to buy Universal Technical Institute? Access our full analysis of the earnings results 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 $102.9 million, up 16.1% year on year, exceeding analysts’ expectations by 2.3%. Still, it was a slower quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 6.5% since the results and currently trades at $12.41.
Read our full analysis of Lincoln Educational’s results here.
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 $499.2 million, up 8% year on year. This print topped analysts’ expectations by 3.2%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ earnings estimates and a decent beat of analysts’ operating margin estimates.
The stock is up 6.2% since reporting and currently trades at $16.50.
Read our full, actionable report on Laureate Education here, it’s free.
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 $670.1 million, up 11.1% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also produced an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.
Bright Horizons had the weakest performance against analyst estimates among its peers. The stock is up 19% since reporting and currently trades at $140.68.
Read our full, actionable report on Bright Horizons here, it’s free.
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