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KinderCare Learning Companies Inc
(NYSE:KLC)
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Rating:50Neutral
Price Target:
$5.00
▲(61.81% Upside)
Action:Reiterated
Date:06/06/26
The score is held back primarily by weakened profitability and a highly leveraged balance sheet despite positive cash generation. Technicals are modestly constructive and earnings-call guidance improved, but valuation remains challenged given ongoing losses and no dividend support.
Positive Factors
Cash generation resilience
Sustained positive operating cash flow and modest free cash flow show the business still converts tuition revenue into cash despite accounting losses. This cash buffer supports capex for center improvements, working-capital needs, and scheduled debt servicing over the next several quarters, improving survivability during a multi-quarter occupancy recovery.
Negative Factors
High financial leverage
A debt-heavy capital structure (roughly $1.6B debt vs $471M equity) constrains strategic optionality and raises refinancing risk if cash flow weakens. Elevated leverage increases sensitivity to higher rates and slows ability to invest in growth or absorb longer occupancy recoveries without material cost of capital or asset sales.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation resilience
Sustained positive operating cash flow and modest free cash flow show the business still converts tuition revenue into cash despite accounting losses. This cash buffer supports capex for center improvements, working-capital needs, and scheduled debt servicing over the next several quarters, improving survivability during a multi-quarter occupancy recovery.
Read all positive factors
KinderCare Learning Companies Inc (KLC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$583.85M
Dividend YieldN/A
Average Volume (3M)1.07M
Price to Earnings (P/E)―
Beta (1Y)1.49
Revenue Growth2.28%
EPS Growth-473.69%
CountryUS
Employees43,700
SectorGeneral
Sector StrengthN/A
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)-3.58
Shares Outstanding118,428,300
10 Day Avg. Volume626,746
30 Day Avg. Volume1,072,223
Financial Highlights & Ratios
PEG Ratio4.20
Price to Book (P/B)0.65
Price to Sales (P/S)0.18
P/FCF Ratio4.46
Enterprise Value/Market Cap4.90
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit6.36
Enterprise Value/Ebitda-13.95
Forecast
1Y Price Target
$4.24Price Target Upside37.31% Upside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)0.19
Revenue Forecast (FY)$2.71B
KinderCare Learning Companies Inc Business Overview & Revenue Model
Company Description
KinderCare Learning Companies, Inc. provides early childhood education and care services in the United States. The company offers community-based early childhood education services for infants, toddlers, preschool, and kindergarten students; and c...
How the Company Makes Money
KLC primarily makes money by charging tuition and care fees paid by families for enrollment in its childcare, preschool, and school-age programs at its centers; these recurring tuition payments typically represent the core revenue stream. The comp...
KinderCare Learning Companies Inc Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Neutral
The call balanced encouraging operational signs—targeted marketing lifts (+15% in targeted inquiries), early conversion improvements, strong Champions and B2B momentum, tightened portfolio actions and raised adjusted EBITDA guidance—against significant near-term financial and operational pressures: enrollment down ~3%, same-center occupancy down 310 bps YoY, sharply lower adjusted EBITDA and adjusted net income versus prior year, and a large noncash impairment driving a reported net loss. Management expressed confidence in execution and the back-half recovery but acknowledged that meaningful margin recovery depends on occupancy improvement and the outcome of portfolio optimization.Positive Updates
Modest Revenue Growth and Raised Full-Year Profit Guidance
Revenue of $673 million in Q1, described as up modestly year-over-year. Management raised full-year adjusted EBITDA guidance to $215 million–$235 million and adjusted EPS guidance to $0.15–$0.25, while maintaining revenue guidance of $2.7 billion–$2.75 billion.
Negative Updates
Enrollment Decline and Occupancy Pressure
Enrollment in ECE centers declined about 3% year-over-year (improved from a 3.6% decline in Q4). Same-center occupancy was 66%, up 150 basis points from Q4 but down 310 basis points versus Q1 last year, and management expects occupancy to remain a primary near-term pressure.
Read all updates
Q1-2026 Updates
Positive
Negative
Modest Revenue Growth and Raised Full-Year Profit Guidance
Revenue of $673 million in Q1, described as up modestly year-over-year. Management raised full-year adjusted EBITDA guidance to $215 million–$235 million and adjusted EPS guidance to $0.15–$0.25, while maintaining revenue guidance of $2.7 billion–$2.75 billion.
Read all positive updates
Company Guidance
KinderCare raised full‑year adjusted EBITDA and adjusted EPS guidance while keeping revenue guidance unchanged at $2.70–2.75 billion; it now expects adjusted EBITDA of $215–235 million and adjusted EPS of $0.15–0.25. Management continues to assume tuition contributes +3% and occupancy -3% (offsetting), expects Champions and B2B to add ~1% to revenue, and projects new center openings and acquisitions to each contribute ~50 basis points; CapEx is targeted at ~5% of revenue, free cash flow $35–40 million, and a modeled effective tax rate of 27%. Balance‑sheet and quarterly guide metrics include net debt/adjusted EBITDA just under 3x, $133 million cash, $190 million revolver capacity, and Q2 revenue and adjusted EBITDA guides of $690–700 million and $63–67 million, respectively. Notable Q1 figures referenced in the call: revenue $673 million, adjusted EBITDA $52 million (vs. $83M prior Y/Y), adjusted net income $4.2M/adj. EPS $0.04 (vs. $27M/$0.23 prior), reported net loss $290M/GAAP EPS -$2.45, same‑center occupancy 66% (down 310 bps YoY, up 150 bps QoQ), pricing contributed ~2% to ECE, and enrollment was down ~3% YoY.KinderCare Learning Companies Inc Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
38
Negative
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.74B | 2.73B | 2.66B | 2.51B | 2.17B | 1.81B |
| Gross Profit | 449.67M | 481.23M | 630.52M | 685.86M | 444.20M | 368.30M |
| EBITDA | -205.15M | 114.60M | 209.91M | 391.86M | 176.91M | 141.22M |
| Net Income | -423.87M | -112.88M | -92.84M | 102.56M | 219.17M | 88.41M |
Balance Sheet | ||||||
| Total Assets | 3.44B | 3.75B | 3.65B | 3.65B | 3.66B | 3.47B |
| Cash, Cash Equivalents and Short-Term Investments | 132.87M | 133.21M | 62.34M | 156.15M | 105.21M | 177.25M |
| Total Debt | 2.53B | 2.53B | 2.39B | 2.69B | 2.86B | 2.89B |
| Total Liabilities | 2.97B | 2.99B | 2.78B | 3.15B | 3.26B | 3.21B |
| Stockholders Equity | 471.09M | 755.26M | 864.51M | 506.88M | 407.69M | 255.61M |
Cash Flow | ||||||
| Free Cash Flow | 36.25M | 110.26M | -16.43M | 174.50M | 202.18M | 116.40M |
| Operating Cash Flow | 171.15M | 238.53M | 115.89M | 303.54M | 341.61M | 183.29M |
| Investing Cash Flow | -154.68M | -154.42M | -147.24M | -117.66M | -299.73M | -80.15M |
| Financing Cash Flow | -14.98M | -13.25M | -62.63M | -134.94M | -117.66M | 20.87M |
KinderCare Learning Companies Inc Technical Analysis
Positive
3.09
Price Trends
4.03
Positive
3.57
Positive
4.31
Positive
Market Momentum
0.27
Negative
75.00
Negative
91.08
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLC, the sentiment is Positive. The current price of 3.09 is below the 20-day moving average (MA) of 4.25, below the 50-day MA of 4.03, and below the 200-day MA of 4.31, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 75.00 is Negative, neither overbought nor oversold. The STOCH value of 91.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KLC.
KinderCare Learning Companies Inc Risk Analysis
KinderCare Learning Companies Inc disclosed 35 risk factors in its most recent earnings report. KinderCare Learning Companies Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
KinderCare Learning Companies Inc Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $7.95B | 17.92 | 10.79% | 1.03% | 12.38% | 11.05% | |
68 Neutral | $1.05B | 30.24 | 14.02% | ― | 3.84% | 87.34% | |
66 Neutral | $1.72B | 76.27 | 11.72% | ― | 19.92% | 84.00% | |
62 Neutral | $1.70B | ― | -10.06% | ― | 9.79% | 8.61% | |
61 Neutral | $2.75B | 64.98 | 13.02% | ― | 11.03% | -26.34% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
50 Neutral | $583.85M | -1.42 | -55.02% | ― | 2.28% | -473.69% |
* General Sector Average
KLC
KinderCare Learning Companies Inc
5.09
-4.44
-46.59%
APEI
American Public Education
59.34
28.46
92.16%
LINC
Lincoln Edu
55.68
32.59
141.14%
EDU
New Oriental Education Tech
47.81
-3.56
-6.93%
UTI
Universal Technical Institute
51.20
19.40
61.01%
COUR
Coursera
5.80
-3.03
-34.31%
KinderCare Learning Companies Inc Corporate Events
Executive/Board ChangesShareholder Meetings
KinderCare Shareholders Back Board, Auditor and Executive Pay
Positive
Jun 5, 2026
On June 4, 2026, KinderCare Learning Companies Inc. held its 2026 annual meeting of stockholders, where shareholders elected Michael Nuzzo and John T. “Tom” Wyatt as Class II directors to serve until 2029 and re-elected Jean Desravines...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.