Analyst Joshua Chan of UBS maintained a Buy rating on KinderCare Learning Companies Inc, reducing the price target to $10.00.
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Joshua Chan has given his Buy rating due to a combination of factors influencing KinderCare Learning Companies Inc. While the enrollment trajectory has been challenging, Chan believes that the company’s valuation at 5X NTM EBITDA does not reflect its intrinsic value, suggesting potential for appreciation. Despite some risks in the implied Q4 EBITDA guidance due to typical seasonality, the Q3 results are expected to align with consensus estimates, indicating stability in the company’s financial performance.
Chan also notes that while the 2025 EBITDA guidance carries some risk, the overall annual guidance remains achievable. The enrollment softness is a concern, but the company’s margin execution and the constructive Champions selling season provide a buffer against these challenges. Chan’s analysis suggests that, despite the uncertainties, the company’s current valuation presents a buying opportunity for investors.
Chan covers the Industrials sector, focusing on stocks such as Comfort Systems, ManpowerGroup, and ARAMARK Holdings. According to TipRanks, Chan has an average return of 6.9% and a 58.75% success rate on recommended stocks.