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Lincoln Gains 33% in 3 Months: Here's What's Driving the Stock
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Lincoln Educational Services Corporation (LINC - Free Report) has gained 32.7% in the past three months, outperforming the Zacks Schools industry, the Zacks Consumer Discretionary sector and the S&P 500 Index. The detailed price performance is shown in the chart below.
Image Source: Zacks Investment Research
This career-oriented post-secondary education service provider is capitalizing on America’s growing preference for alternative education and training programs to the traditional four-year college education. The demand strength, paired with its Lincoln 10.0 hybrid teaching platform and corporate partnerships, is fueling the growth trend and positioning LINC well to reach its long-term targets, which are aimed to be fulfilled by 2027.
The Zacks Consensus Estimate of the company’s 2025 earnings per share (EPS) has moved north from 68 cents to 69 cents in the past 60 days. The estimated value indicates 27.8% year-over-year growth. Also, the earnings estimates for 2024 indicate 10.2% growth from a year ago. The company’s earnings have surpassed expectations in three of the trailing four quarters and missed on one occasion, the average surprise being 226.8%.
Headwinds in the form of increasing costs and expenses associated with new programs, new campuses, marketing investments and higher administrative costs are pressuring the margins. However, Lincoln’s continuous efforts to maintain operational efficiencies and leverage from increased revenues are pushing out the negative flush.
Let us discuss the factors why investors must buy this Zacks Rank #2 (Buy) stock for now.
Driving Factors of LINC Stock
Noteworthy Hybrid Teaching Platform: As the demand for alternative educational programs in America is growing, Lincoln’s hybrid teaching platform, Lincoln 10.0, is fostering interest in the programs it offers. This is because of the flexibility that this platform offers to students finding a balance between work and life while earning their certificate or degree. During the third quarter of 2024, the company highlighted the completion of the first phase rollout of Lincoln 10.0 along with laying the foundation to begin implementing the platform in its nursing programs.
After finishing the first phase rollout of this hybrid teaching model by the end of 2024, the company expects it to be used to teach approximately 65% of its students. Furthermore, upon transitioning the nursing programs to this teaching model by the middle of 2026, the total student population it will serve will reach about 80%. Through Lincoln 10.0, the company aims to continue improving operating efficiencies while benefiting student experiences and outcomes in the upcoming period, as the platform is contributing to its student start growth and strong corporate partnership activity. In the first nine months of 2024, Lincoln’s student starts grew 16.6% year over year to 15,163, with the student population at the end of the period rising 13.3%.
Accretive Corporate Partnerships: Another growth driver of Lincoln is its engagement in accretive corporate partnerships. These partnerships engage in enlightening students on the ongoing business trends and the specializations needed to enhance their skills and fit in the job profile. In October 2024, the company announced two new employer-specific training programs with Hyundai Motor of America and Genesis Motor of America. These programs are supplementary to Lincoln’s automotive service technology programs across America and are meant to help students build skills on Hyundai and Genesis equipment and systems. Recently the company finalized terms to open its third Tesla training center at the Melrose Park, IL campus.
Furthermore, its five-year workforce development agreement with Container Maintenance Corporation (“CMC”) has been going strong over the summer and fall of 2024, highlighting CMC employees' training starts at the company's CMC's Charleston, SC facility. This strategic agreement is expected to generate approximately $6 million in revenues over the five years of its course. Lincoln does not stop here, as it continues seeking active opportunities for corporate partnerships to boost its student start growth and revenue trend.
Long-Term Growth Plans: Lincoln has laid down certain growth targets that it intends to achieve by 2027. Given the ongoing growth trends backed by its operational efficiencies, implementation of Lincoln 10.0 across all its program offerings and engagement in profitable corporate partnerships, the company is well-positioned to achieve the targets in no time. The long-term targets to be achieved by 2027 include revenue growth of $550 million and adjusted EBITDA of $90 million, with an adjusted EBITDA margin of 16%. Furthermore, EPS is expected to be $1.35, with a net income of approximately $43 million and cash from operations of about $65 million.
In the nine months of 2024, revenues grew 16.4% year over year to $320.7 million. The adjusted EBITDA reached $23.1 million during the same time from $10.8 million reported a year ago.
Other Key Picks
Here are other top-ranked stocks from the same sector space.
CHH has a trailing four-quarter earnings surprise of 8.3%, on average. The stock has gained 24.3% in the past year. The Zacks Consensus Estimate for CHH’s 2025 sales and EPS indicates growth of 3.2% and 4.7%, respectively, from the year-ago levels.
Interface, Inc. (TILE - Free Report) presently sports a Zacks Rank of 1. TILE has a trailing four-quarter earnings surprise of 73.3%, on average. The stock has surged 97.9% in the past year.
The Zacks Consensus Estimate for TILE’s 2025 sales and EPS indicates an increase of 3% and 13.1%, respectively, from the year-ago levels.
Universal Technical Institute, Inc. (UTI - Free Report) currently sports a Zacks Rank of 1. UTI has a trailing four-quarter earnings surprise of 54.6%, on average. The stock has soared 107.4% in the past year.
The Zacks Consensus Estimate for UTI’s fiscal 2025 sales and EPS indicates an increase of 10.1% and 28%, respectively, from the year-ago levels.
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Lincoln Gains 33% in 3 Months: Here's What's Driving the Stock
Lincoln Educational Services Corporation (LINC - Free Report) has gained 32.7% in the past three months, outperforming the Zacks Schools industry, the Zacks Consumer Discretionary sector and the S&P 500 Index. The detailed price performance is shown in the chart below.
Image Source: Zacks Investment Research
This career-oriented post-secondary education service provider is capitalizing on America’s growing preference for alternative education and training programs to the traditional four-year college education. The demand strength, paired with its Lincoln 10.0 hybrid teaching platform and corporate partnerships, is fueling the growth trend and positioning LINC well to reach its long-term targets, which are aimed to be fulfilled by 2027.
The Zacks Consensus Estimate of the company’s 2025 earnings per share (EPS) has moved north from 68 cents to 69 cents in the past 60 days. The estimated value indicates 27.8% year-over-year growth. Also, the earnings estimates for 2024 indicate 10.2% growth from a year ago. The company’s earnings have surpassed expectations in three of the trailing four quarters and missed on one occasion, the average surprise being 226.8%.
Headwinds in the form of increasing costs and expenses associated with new programs, new campuses, marketing investments and higher administrative costs are pressuring the margins. However, Lincoln’s continuous efforts to maintain operational efficiencies and leverage from increased revenues are pushing out the negative flush.
Let us discuss the factors why investors must buy this Zacks Rank #2 (Buy) stock for now.
Driving Factors of LINC Stock
Noteworthy Hybrid Teaching Platform: As the demand for alternative educational programs in America is growing, Lincoln’s hybrid teaching platform, Lincoln 10.0, is fostering interest in the programs it offers. This is because of the flexibility that this platform offers to students finding a balance between work and life while earning their certificate or degree. During the third quarter of 2024, the company highlighted the completion of the first phase rollout of Lincoln 10.0 along with laying the foundation to begin implementing the platform in its nursing programs.
After finishing the first phase rollout of this hybrid teaching model by the end of 2024, the company expects it to be used to teach approximately 65% of its students. Furthermore, upon transitioning the nursing programs to this teaching model by the middle of 2026, the total student population it will serve will reach about 80%. Through Lincoln 10.0, the company aims to continue improving operating efficiencies while benefiting student experiences and outcomes in the upcoming period, as the platform is contributing to its student start growth and strong corporate partnership activity. In the first nine months of 2024, Lincoln’s student starts grew 16.6% year over year to 15,163, with the student population at the end of the period rising 13.3%.
Accretive Corporate Partnerships: Another growth driver of Lincoln is its engagement in accretive corporate partnerships. These partnerships engage in enlightening students on the ongoing business trends and the specializations needed to enhance their skills and fit in the job profile. In October 2024, the company announced two new employer-specific training programs with Hyundai Motor of America and Genesis Motor of America. These programs are supplementary to Lincoln’s automotive service technology programs across America and are meant to help students build skills on Hyundai and Genesis equipment and systems. Recently the company finalized terms to open its third Tesla training center at the Melrose Park, IL campus.
Furthermore, its five-year workforce development agreement with Container Maintenance Corporation (“CMC”) has been going strong over the summer and fall of 2024, highlighting CMC employees' training starts at the company's CMC's Charleston, SC facility. This strategic agreement is expected to generate approximately $6 million in revenues over the five years of its course. Lincoln does not stop here, as it continues seeking active opportunities for corporate partnerships to boost its student start growth and revenue trend.
Long-Term Growth Plans: Lincoln has laid down certain growth targets that it intends to achieve by 2027. Given the ongoing growth trends backed by its operational efficiencies, implementation of Lincoln 10.0 across all its program offerings and engagement in profitable corporate partnerships, the company is well-positioned to achieve the targets in no time. The long-term targets to be achieved by 2027 include revenue growth of $550 million and adjusted EBITDA of $90 million, with an adjusted EBITDA margin of 16%. Furthermore, EPS is expected to be $1.35, with a net income of approximately $43 million and cash from operations of about $65 million.
In the nine months of 2024, revenues grew 16.4% year over year to $320.7 million. The adjusted EBITDA reached $23.1 million during the same time from $10.8 million reported a year ago.
Other Key Picks
Here are other top-ranked stocks from the same sector space.
Choice Hotels International, Inc. (CHH - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CHH has a trailing four-quarter earnings surprise of 8.3%, on average. The stock has gained 24.3% in the past year. The Zacks Consensus Estimate for CHH’s 2025 sales and EPS indicates growth of 3.2% and 4.7%, respectively, from the year-ago levels.
Interface, Inc. (TILE - Free Report) presently sports a Zacks Rank of 1. TILE has a trailing four-quarter earnings surprise of 73.3%, on average. The stock has surged 97.9% in the past year.
The Zacks Consensus Estimate for TILE’s 2025 sales and EPS indicates an increase of 3% and 13.1%, respectively, from the year-ago levels.
Universal Technical Institute, Inc. (UTI - Free Report) currently sports a Zacks Rank of 1. UTI has a trailing four-quarter earnings surprise of 54.6%, on average. The stock has soared 107.4% in the past year.
The Zacks Consensus Estimate for UTI’s fiscal 2025 sales and EPS indicates an increase of 10.1% and 28%, respectively, from the year-ago levels.