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Universal Technical (UTI) Q2 Earnings Lag Estimates, '24 View Up
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Universal Technical Institute, Inc.’s (UTI - Free Report) stock lost 4.1% in the after-hours trading session on May 8 after it reported mixed second-quarter fiscal 2024 results.
Quarterly earnings missed the Zacks Consensus Estimate but revenues beat the same. On a year-over-year basis, the top and bottom lines increased impressively.
Troy Anderson, CFO of UTI, said, "Based on our current momentum and strategic execution, we are raising our fiscal year 2024 new student start, revenue and profitability guidance. Additionally, given the visibility we have into the remainder of the year and the strength of our underlying operating model, we are introducing initial projections for fiscal year 2025, where we are estimating revenue of nearly $800 million and adjusted EBITDA margin expansion of at least 100 basis points versus fiscal 2024, further building upon the margin expansion we are expecting this year."
Inside the Numbers
Adjusted earnings per share (EPS) of 14 cents lagged the consensus mark of 15 cents by 6.7% but rose significantly from the year-ago quarter’s level of 4 cents.
Universal Technical Institute Inc Price, Consensus and EPS Surprise
Quarterly revenues of $184.2 million topped the consensus mark of $177 million by 4.1% and increased 12.4% from the prior-year quarter’s figure. The upside was mainly attributable to growth in UTI and Concorde new student starts.
Total new student starts totaled 5,480, up 18.5% from 4,626 students reported a year ago.
Adjusted EBITDA was $22.6 million, up 17.8% from $19.2 million reported a year ago. Adjusted EBITDA margins of 12.3% grew 360 basis points (bps) from a year ago.
Segment Highlights
UTI: Revenues from the segment rose 14.7% to $123.3 million year over year. New student starts totaled 2,840, up 19.6% from the prior year, and average undergraduate full-time active students increased 10.3%. Revenue per student was $8,900, up from $8,600 reported a year ago.
The double-digit revenues and new student start growth in the segment benefited from the 14 new programs launched in the past year and overall positive performance across the other programs and campuses.
Adjusted EBITDA was $24.4 million, up from $17.4 million reported a year ago. Adjusted EBITDA margins of 19.8% grew 360 bps from a year ago.
Concorde: Revenues from the segment were $60.9 million during the reported period, up 8.2% from a year ago. New student starts came in at 2,640, up 17.2% from a year ago. Revenue per student remained stable at $7,200 year over year.
Adjusted EBITDA in the segment totaled $5.4 million, significantly down from $8.4 million reported a year ago. Adjusted EBITDA margins of 8.9% fell 600 bps from a year ago.
Financial Details
At the end of second-quarter fiscal 2024, the company had cash and cash equivalents of $116.1 million compared with $151.5 million at the fiscal 2023-end.
Long-term debt is now $139.3 million, down from $159.6 million at the end of the fiscal 2023. Net debt to trailing 12-month adjusted EBITDA was 0.33x at the reported quarter end.
For the first six months of fiscal 2024, cash provided by operating activities totaled $8.3 million versus cash used in operating activities of $4.3 million in the year-ago period.
Adjusted free cash flow in the first half was $3.7 million compared with negative $2.01 million a year ago.
Fiscal 2024 Guidance Raised
Universal Technical now expects new student starts in the 25,500-26,500 range, up from 24,500-25,500 guided earlier. This suggests an increase from fiscal 2023 levels of 22,613.
Revenues are now projected to be in the range of $720-$730 million, up from the prior estimate of $710-$720 million. The expected figure indicates an increase from the previous year’s levels of $607.4 million.
Net income is now projected in the range of $37-$41 million, up from the prior estimate of $36-$40 million. The company reported net income of $12.3 million in the previous year.
The company now expects adjusted EBITDA in the range of $102-$104 million, up from the prior estimate of $100-$103 million. The projected figure indicated a rise from $64.3 million in the year-ago period.
Universal Technical anticipates adjusted EPS in the range of 68-73 cents, up from the prior estimate of 67-72 cents. The company reported an adjusted EPS of 13 cents in the prior year.
Adjusted free cash flow is still expected to be between $62 million and $66 million.
American Public Education, Inc. (APEI - Free Report) delivered strong results for first-quarter 2024. The bottom line handily surpassed the Zacks Consensus Estimate and significantly improved from the previous year.
Revenues also beat the analysts’ expectations and jumped year over year on the back of contributions from the American Public University System and Hondros College of Nursing segment. Yet, lower revenues from Rasmussen University and Graduate School partially offset the growth.
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for third-quarter fiscal 2024, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. Also, both metrics increased year over year.
Revenue growth and operational efficiencies, which were partially offset by investments in Growth with Purpose initiatives, helped ATGE post solid margins. Impressively, its Growth with Purpose strategy allowed the company to expand access to high-quality, in-demand programs.
Strategic Education, Inc. (STRA - Free Report) , or SEI, reported stellar results for first-quarter 2024. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.
The quarterly results reflect solid growth across the company’s three reportable segments, attributable to continued enrollment growth in the U.S. Higher Education segment, especially employer-affiliated enrollments, and total enrollment improvement in the Australia/New Zealand segment.
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Universal Technical (UTI) Q2 Earnings Lag Estimates, '24 View Up
Universal Technical Institute, Inc.’s (UTI - Free Report) stock lost 4.1% in the after-hours trading session on May 8 after it reported mixed second-quarter fiscal 2024 results.
Quarterly earnings missed the Zacks Consensus Estimate but revenues beat the same. On a year-over-year basis, the top and bottom lines increased impressively.
Troy Anderson, CFO of UTI, said, "Based on our current momentum and strategic execution, we are raising our fiscal year 2024 new student start, revenue and profitability guidance. Additionally, given the visibility we have into the remainder of the year and the strength of our underlying operating model, we are introducing initial projections for fiscal year 2025, where we are estimating revenue of nearly $800 million and adjusted EBITDA margin expansion of at least 100 basis points versus fiscal 2024, further building upon the margin expansion we are expecting this year."
Inside the Numbers
Adjusted earnings per share (EPS) of 14 cents lagged the consensus mark of 15 cents by 6.7% but rose significantly from the year-ago quarter’s level of 4 cents.
Universal Technical Institute Inc Price, Consensus and EPS Surprise
Universal Technical Institute Inc price-consensus-eps-surprise-chart | Universal Technical Institute Inc Quote
Quarterly revenues of $184.2 million topped the consensus mark of $177 million by 4.1% and increased 12.4% from the prior-year quarter’s figure. The upside was mainly attributable to growth in UTI and Concorde new student starts.
Total new student starts totaled 5,480, up 18.5% from 4,626 students reported a year ago.
Adjusted EBITDA was $22.6 million, up 17.8% from $19.2 million reported a year ago. Adjusted EBITDA margins of 12.3% grew 360 basis points (bps) from a year ago.
Segment Highlights
UTI: Revenues from the segment rose 14.7% to $123.3 million year over year. New student starts totaled 2,840, up 19.6% from the prior year, and average undergraduate full-time active students increased 10.3%. Revenue per student was $8,900, up from $8,600 reported a year ago.
The double-digit revenues and new student start growth in the segment benefited from the 14 new programs launched in the past year and overall positive performance across the other programs and campuses.
Adjusted EBITDA was $24.4 million, up from $17.4 million reported a year ago. Adjusted EBITDA margins of 19.8% grew 360 bps from a year ago.
Concorde: Revenues from the segment were $60.9 million during the reported period, up 8.2% from a year ago. New student starts came in at 2,640, up 17.2% from a year ago. Revenue per student remained stable at $7,200 year over year.
Adjusted EBITDA in the segment totaled $5.4 million, significantly down from $8.4 million reported a year ago. Adjusted EBITDA margins of 8.9% fell 600 bps from a year ago.
Financial Details
At the end of second-quarter fiscal 2024, the company had cash and cash equivalents of $116.1 million compared with $151.5 million at the fiscal 2023-end.
Long-term debt is now $139.3 million, down from $159.6 million at the end of the fiscal 2023. Net debt to trailing 12-month adjusted EBITDA was 0.33x at the reported quarter end.
For the first six months of fiscal 2024, cash provided by operating activities totaled $8.3 million versus cash used in operating activities of $4.3 million in the year-ago period.
Adjusted free cash flow in the first half was $3.7 million compared with negative $2.01 million a year ago.
Fiscal 2024 Guidance Raised
Universal Technical now expects new student starts in the 25,500-26,500 range, up from 24,500-25,500 guided earlier. This suggests an increase from fiscal 2023 levels of 22,613.
Revenues are now projected to be in the range of $720-$730 million, up from the prior estimate of $710-$720 million. The expected figure indicates an increase from the previous year’s levels of $607.4 million.
Net income is now projected in the range of $37-$41 million, up from the prior estimate of $36-$40 million. The company reported net income of $12.3 million in the previous year.
The company now expects adjusted EBITDA in the range of $102-$104 million, up from the prior estimate of $100-$103 million. The projected figure indicated a rise from $64.3 million in the year-ago period.
Universal Technical anticipates adjusted EPS in the range of 68-73 cents, up from the prior estimate of 67-72 cents. The company reported an adjusted EPS of 13 cents in the prior year.
Adjusted free cash flow is still expected to be between $62 million and $66 million.
Zacks Rank
UTI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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American Public Education, Inc. (APEI - Free Report) delivered strong results for first-quarter 2024. The bottom line handily surpassed the Zacks Consensus Estimate and significantly improved from the previous year.
Revenues also beat the analysts’ expectations and jumped year over year on the back of contributions from the American Public University System and Hondros College of Nursing segment. Yet, lower revenues from Rasmussen University and Graduate School partially offset the growth.
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for third-quarter fiscal 2024, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. Also, both metrics increased year over year.
Revenue growth and operational efficiencies, which were partially offset by investments in Growth with Purpose initiatives, helped ATGE post solid margins. Impressively, its Growth with Purpose strategy allowed the company to expand access to high-quality, in-demand programs.
Strategic Education, Inc. (STRA - Free Report) , or SEI, reported stellar results for first-quarter 2024. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.
The quarterly results reflect solid growth across the company’s three reportable segments, attributable to continued enrollment growth in the U.S. Higher Education segment, especially employer-affiliated enrollments, and total enrollment improvement in the Australia/New Zealand segment.