Analyst Toni Kaplan of Morgan Stanley maintained a Buy rating on KinderCare Learning Companies Inc (KLC – Research Report), with a price target of $21.00.
Toni Kaplan has given his Buy rating due to a combination of factors that highlight KinderCare Learning Companies Inc’s strong performance and potential for growth. The company reported a 4.7% revenue growth, which was in line with consensus estimates and slightly ahead of Morgan Stanley’s expectations. This growth was driven by a 4.0% increase in Early Childhood Education revenue and a notable 12.5% increase in Champions revenue, which outperformed both Morgan Stanley’s and consensus estimates.
Additionally, the company’s adjusted EBITDA grew by 5% during the quarter, with margins exceeding expectations. This was supported by successful enrollment gains and the opening of new centers. Despite a slight dip in occupancy rates, the company’s commitment to expanding its center count, particularly in the before-and-after school segment, demonstrates a strong growth strategy. While there are some concerns about government subsidy risks, the overall financial results and strategic initiatives justify the Buy rating.