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KinderCare Learning Companies Inc (KLC)
NYSE:KLC
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KinderCare Learning Companies Inc
(NYSE:KLC)
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Select Model
Rating:51Neutral
Price Target:
$4.00
▼(-5.88% Downside)
KinderCare Learning Companies Inc's overall stock score reflects strong revenue growth but significant challenges in profitability and financial stability. The bearish technical indicators and negative valuation metrics further weigh on the score. However, recent positive corporate events provide some optimism for future improvements.
Positive Factors
Revenue Growth
Consistent revenue growth, driven by programs like Champions, indicates a strong market position and potential for sustained expansion.
Leadership Change
The return of Tom Wyatt as CEO is expected to leverage his extensive experience to enhance market position and operational excellence.
Employer Partnerships
Strong employer partnerships expand market reach and enhance revenue stability, supporting long-term growth strategies.
Negative Factors
High Debt Levels
High leverage poses financial risks, potentially limiting flexibility and increasing vulnerability to economic downturns.
Enrollment Challenges
Declining enrollments can impact revenue growth and profitability, challenging the company's ability to maintain market share.
Subsidy Business Headwinds
Challenges in subsidy funding can strain financial performance, affecting revenue and margin sustainability.
KinderCare Learning Companies Inc (KLC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$502.85M
Dividend YieldN/A
Average Volume (3M)1.16M
Price to Earnings (P/E)―
Beta (1Y)1.05
Revenue Growth2.20%
EPS Growth-229.99%
CountryUS
Employees43,690
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.13
Shares Outstanding118,318,560
10 Day Avg. Volume781,607
30 Day Avg. Volume1,157,231
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)1.98
Price to Sales (P/S)0.64
P/FCF Ratio-104.31
Enterprise Value/Market Cap6.30
Enterprise Value/Revenue1.18
Enterprise Value/Gross Profit5.28
Enterprise Value/Ebitda16.87
Forecast
1Y Price Target
$5.75Price Target Upside35.29% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)0.67
Revenue Forecast (FY)$2.73B
KinderCare Learning Companies Inc Business Overview & Revenue Model
Company DescriptionKinderCare Learning Companies Inc. (KLC) is a leading provider of early childhood education and care services in the United States. Operating a network of childcare centers and preschools, KLC caters to children from infancy through age 12. The company focuses on delivering high-quality educational programs that promote social, emotional, and cognitive development. With a commitment to fostering a nurturing environment, KLC offers a range of services, including full-day and part-time care, curriculum-based learning, and enrichment programs designed to meet the needs of children and their families.
How the Company Makes MoneyKinderCare Learning Companies Inc. generates revenue primarily through tuition fees paid by parents for childcare and educational services. The company's revenue model is built around various key streams, including enrollment fees, ongoing monthly tuition payments, and additional charges for enrichment programs and special activities. KLC often establishes partnerships with employers and organizations to provide childcare benefits to employees, which can lead to increased enrollment. Additionally, KLC may receive state and federal funding for early childhood education programs, further contributing to its revenue. The combination of these factors allows KinderCare to maintain a robust financial standing while delivering quality education and care.
KinderCare Learning Companies Inc Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 19, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted steady revenue growth driven by successful expansion in the Champions program and employer partnerships. However, challenges with enrollment, occupancy rates, and subsidy business headwinds pressured margins and net income. While operational improvements were noted, current economic conditions and subsidy rate reductions posed significant obstacles.Q3-2025 Updates
Positive Updates
Revenue Growth
KinderCare Learning Companies, Inc. reported third-quarter revenue of $677 million, up nearly 1% from the previous year, driven by growth in the Champions program.
Champions Program Success
The Champions before and after school business achieved double-digit revenue growth year-over-year, with 200 new site wins and $50 million in quarterly revenue.
Employer Partnerships
KinderCare Learning Companies, Inc. signed 20 new contracts with employers, expanding their reach to 317,000 employees across 17 states.
Tuck-in Acquisitions
The company acquired six centers in the quarter, bringing the year-to-date total to 20, funded from a $138 million free cash flow.
Operational Improvements
There were successful operational initiatives in opportunity regions, with some centers significantly increasing occupancy through targeted strategies.
Negative Updates
Enrollment Challenges
Average weekly enrollments fell short of last year's mark, with total average weekly full-time enrollments decreasing by 190 basis points.
Occupancy Rates Decline
Same center occupancy was at the lower end of expectations at 67%, down 160 basis points from a year ago.
Subsidy Business Headwinds
There were setbacks in the subsidy business, with lower tuition reimbursement rates and fewer new student authorizations in several states.
Earnings and Margin Pressure
Net income for the quarter was $4.6 million, down from the previous quarter's $54 million, with adjusted EBITDA down 7% year-over-year.
Lower Than Expected Tuition Growth
Tuition growth contributed 2% to revenue, lower than anticipated due to a higher subsidy mix and smaller rate increases.
Company Guidance
During the third quarter of 2025, KinderCare Learning Companies, Inc. reported revenue of $677 million, reflecting a growth of 0.8% compared to the previous year, driven primarily by their Champions program. Same center revenue remained flat at $617 million, with an occupancy rate of 67%, which is at the lower end of their expected range due to persistent challenges in organic growth and economic factors influencing family decision-making. The company faced a decline in average weekly enrollments and experienced headwinds in their subsidy business, with a notable impact in Indiana where subsidy enrollments decreased by nearly 1,000 children. Despite these challenges, KinderCare continued to expand its center count through new openings and tuck-in acquisitions and maintained strong employer partnerships, resulting in a 2% increase in tuition growth. Looking ahead, the company expects revenue for the full year 2025 to be between $2.72 billion and $2.74 billion, with adjusted EBITDA between $290 million and $295 million. While the company anticipates a slower recovery in enrollment and occupancy, they remain focused on operational efficiency and growth initiatives, with confidence in their long-term strategy and ability to navigate economic uncertainties.KinderCare Learning Companies Inc Financial Statement Overview
Summary
KinderCare Learning Companies Inc shows strong revenue growth but struggles with profitability and financial stability. High debt levels and negative net profit margin are concerning, though cash flow is improving.Income Statement
KinderCare Learning Companies Inc has shown a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) revenue growth rate is strong at 19.9%, indicating a positive trajectory. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -2.23%. The gross profit margin is moderate at 22.94%, but the EBIT and EBITDA margins are relatively low, suggesting challenges in operational efficiency.55
Neutral
Balance Sheet
The balance sheet reflects high leverage, with a debt-to-equity ratio of 2.67 in the TTM period, indicating significant reliance on debt financing. The return on equity is negative at -8.23%, pointing to inefficiencies in generating returns for shareholders. The equity ratio is not explicitly calculated, but the high debt levels suggest potential financial risk.45
Neutral
Cash Flow
Cash flow analysis shows improvement, with a free cash flow growth rate of 41.63% in the TTM period. The operating cash flow to net income ratio is 0.43, indicating some cash generation capability despite net losses. The free cash flow to net income ratio is 0.24, suggesting that while free cash flow is positive, it is not yet sufficient to cover net losses fully.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.69B | 2.66B | 2.51B | 2.17B | 1.81B | 1.37B |
| Gross Profit | 599.64M | 630.52M | 685.86M | 444.20M | 368.30M | 165.49M |
| EBITDA | 187.72M | 209.91M | 391.86M | 176.91M | 141.22M | -6.55M |
| Net Income | -69.29M | -92.84M | 102.56M | 219.17M | 88.41M | -129.50M |
Balance Sheet | ||||||
| Total Assets | 3.88B | 3.65B | 3.65B | 3.66B | 3.47B | 3.27B |
| Cash, Cash Equivalents and Short-Term Investments | 174.73M | 62.34M | 156.15M | 105.21M | 177.25M | 53.23M |
| Total Debt | 1.60B | 2.39B | 2.69B | 2.86B | 2.89B | 2.85B |
| Total Liabilities | 2.95B | 2.78B | 3.15B | 3.26B | 3.21B | 3.13B |
| Stockholders Equity | 931.21M | 864.51M | 506.88M | 407.69M | 255.61M | 136.28M |
Cash Flow | ||||||
| Free Cash Flow | 59.80M | -16.43M | 174.50M | 202.18M | 116.40M | -34.60M |
| Operating Cash Flow | 193.43M | 115.89M | 303.54M | 341.61M | 183.29M | 13.59M |
| Investing Cash Flow | -152.96M | -147.24M | -117.66M | -299.73M | -80.15M | -48.48M |
| Financing Cash Flow | -2.98M | -62.63M | -134.94M | -117.66M | 20.87M | 47.77M |
KinderCare Learning Companies Inc Technical Analysis
Negative
4.25
Price Trends
4.91
Negative
6.19
Negative
8.96
Negative
Market Momentum
-0.07
Negative
42.11
Neutral
47.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLC, the sentiment is Negative. The current price of 4.25 is below the 20-day moving average (MA) of 4.33, below the 50-day MA of 4.91, and below the 200-day MA of 8.96, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 42.11 is Neutral, neither overbought nor oversold. The STOCH value of 47.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KLC.
KinderCare Learning Companies Inc Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $9.10B | 24.52 | 9.28% | 1.04% | 7.22% | -2.84% | |
68 Neutral | $685.78M | 28.87 | 11.20% | ― | 6.75% | 141.11% | |
63 Neutral | $1.46B | 23.89 | 21.42% | ― | 14.05% | 51.96% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.28B | -25.91 | -7.43% | ― | 8.10% | 43.35% | |
53 Neutral | $767.51M | 53.80 | 7.94% | ― | 16.90% | 41.11% | |
51 Neutral | $502.85M | -6.73 | -11.88% | ― | 2.20% | -229.99% |
* Consumer Defensive Sector Average
KLC
KinderCare Learning Companies Inc
4.22
-13.66
-76.40%
APEI
American Public Education
37.82
15.50
69.44%
LINC
Lincoln Edu
24.37
8.57
54.24%
EDU
New Oriental Education Tech
56.04
-7.20
-11.39%
UTI
Universal Technical Institute
27.10
0.57
2.15%
COUR
Coursera
7.37
-1.12
-13.19%
KinderCare Learning Companies Inc Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
KinderCare Appoints Tom Wyatt as New CEO
Positive
Dec 3, 2025
On December 2, 2025, KinderCare Learning Companies appointed Tom Wyatt as Chief Executive Officer, succeeding Paul Thompson, who will remain with the company until the end of the year to ensure a smooth transition. Wyatt, who has previously served as CEO and Chairman of the Board, is expected to lead the company through its next phase of growth and expansion. The transition is part of a strategic move to leverage Wyatt’s extensive experience and leadership to enhance KinderCare’s market position and operational excellence.
Executive/Board ChangesBusiness Operations and Strategy
KinderCare Appoints New COO Lindsay Sorhondo
Positive
Nov 10, 2025
On November 5, 2025, KinderCare Learning Companies appointed Lindsay Sorhondo as Executive Vice President and Chief Operating Officer, effective November 11, 2025. Sorhondo, who has been with KinderCare since 2013, previously served as Chief Innovation Officer and has played a significant role in the company’s growth and operational success. In her new role, she will oversee strategy, operations, and growth channels, aiming to drive innovation and operational excellence. Her promotion is seen as a strategic move to further enhance KinderCare’s mission of providing exceptional early education experiences, aligning with the company’s continued expansion and service improvement goals.
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.