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KinderCare Learning Companies Inc (KLC)
NYSE:KLC
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KinderCare Learning Companies Inc
(NYSE:KLC)
Rating:55Neutral
Price Target:
$10.50
▲(4.58%Upside)
Positive Factors
Profitability
Management remains confident in the fiscal year guide given the strong profitability generated even in a challenged enrollment environment.
Revenue Growth
KinderCare is confident in its ability to achieve medium-term revenue growth targets, driven by pricing, B2B contributions, and M&A activities.
Negative Factors
Enrollment
Total revenue was below expectations, driven by lower-than-expected enrollments within ECE.
Occupancy
Occupancy took a step back as a result of the enrollment decline.
KinderCare Learning Companies Inc (KLC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.18B
Dividend YieldN/A
Average Volume (3M)518.82K
Price to Earnings (P/E)35.8
Beta (1Y)1.09
Revenue Growth4.87%
EPS Growth-198.67%
CountryUS
Employees43,690
SectorConsumer Defensive
Sector Strength55
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.23
Shares Outstanding118,006,325
10 Day Avg. Volume448,468
30 Day Avg. Volume518,817
Financial Highlights & Ratios
PEG Ratio-1.02
Price to Book (P/B)1.28
Price to Sales (P/S)0.00
P/FCF Ratio22.54
Enterprise Value/Market Cap2.09
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit5.92
Enterprise Value/Ebitda6.45
Forecast
1Y Price Target
$19.83Price Target Upside97.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
KinderCare Learning Companies Inc Business Overview & Revenue Model
Company DescriptionKinderCare Learning Companies, Inc. provides early childhood education and care services in the United States. The company offers infant, toddler, preschool, kindergarten, and before- and after-school programs in various categories comprising community-based and employer-sponsored early childhood education and care, and before- and after-school educational services. As of October 2, 2021, it served children ranging from 6 weeks to 12 years of age through 1,490 early childhood education centers with a licensed capacity of 195,000 and contracts for approximately 650 before-and after-school sites in 40 states and the District of Columbia. The company was founded in 1969 and is based in Portland, Oregon.
How the Company Makes MoneyKinderCare Learning Companies Inc generates revenue primarily through tuition fees charged to parents for enrolling their children in its early childhood education and care programs. The company's key revenue streams include full-time and part-time enrollment options, as well as before-and-after school care services. Additionally, KLC may receive funding through partnerships with community organizations, local businesses, and government programs designed to support early childhood education. Factors contributing to its earnings include a strong reputation for quality care, strategic location of centers across the U.S., and an emphasis on curriculum development and staff training.
KinderCare Learning Companies Inc Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -25.41%|
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Positive
KinderCare's earnings call highlighted solid revenue and profit growth, successful expansion and partnerships, and operational efficiency. However, challenges with enrollment delays and same-center revenue growth were noted. The company remains confident in its long-term growth prospects and ability to manage expenses effectively.Q1-2025 Updates
Positive Updates
Revenue and Profit Growth
KinderCare's first quarter revenue grew by 2% to $668 million, driven by stable tuition growth and an increased number of centers and sites. Adjusted EBITDA increased by 12% year-over-year to $84 million, highlighting strong profitability and operational leverage.
Expansion and Acquisitions
KinderCare added 10 centers, including an acquisition in Idaho, and expanded the Champions segment with 19 new sites. The company expects to continue growing its pipeline of new center openings and tuck-in acquisitions throughout the year.
B2B Growth and Partnerships
The B2B platform continues to grow with new partnerships, including Dollar General, LG Energy Solutions, and Hand and Stone Massage. Two new KinderCare For Employer centers opened in Q1, indicating strong demand for employer-based childcare solutions.
Operational Efficiency
General and administrative expenses were down as a percentage of revenue, demonstrating KinderCare's effective cost management and operational efficiency.
Awards and Recognition
KinderCare received Gallup's Exceptional Workplace Award for the ninth consecutive year, underscoring its strong workplace culture and employee engagement.
Negative Updates
Enrollment Delays
The first quarter saw a modest 50-basis-point year-over-year decline in same-center occupancy due to delays in enrollment decisions, attributed to consumer hesitancy and uncertainty.
Challenges in Same-Center Revenue
Same-center revenue increased by only 1.4%, with a slight decrease in occupancy reflecting slower enrollment progress at the start of the year.
Company Guidance
During the first quarter earnings call, KinderCare's management provided guidance for 2025, highlighting a 2% increase in revenue, reaching $668 million, which was in line with their expectations. The company reported an adjusted EBITDA of $84 million, marking a 12% year-over-year increase, and a net income of $21 million. Management reaffirmed their 2025 guidance ranges, projecting revenue between $2.75 billion and $2.85 billion, adjusted EBITDA between $310 million and $325 million, and adjusted EPS between $0.75 and $0.85. Despite a 50-basis-point decline in same-center occupancy to 69.1%, KinderCare expects occupancy to remain relatively flat for the year, with long-term growth projections of 1% to 2% annually. The company also noted stable tuition growth, pricing discipline, and continued expansion, including 10 new early childhood education centers and 19 new Champion sites. The balance sheet remains strong with a net debt to adjusted EBITDA ratio of 2.6 times, and management emphasized their ability to leverage multiple operational levers to sustain profitability amidst macroeconomic volatility.KinderCare Learning Companies Inc Financial Statement Overview
Summary
KinderCare Learning Companies Inc shows potential through revenue growth but faces challenges in profitability and financial stability. High leverage and negative net income pose risks, while negative free cash flow indicates cash management issues. The company needs to improve its operational efficiency and financial health to enhance shareholder value and sustain growth.Income Statement
KinderCare Learning Companies Inc shows a mixed performance in its income statement. Despite a consistent increase in total revenue over the years, the company has recently reported a negative net income, indicating net losses. The gross profit margin is strong, suggesting effective cost management in producing services. However, the EBIT and net profit margins have declined, showing challenges in maintaining operational efficiency and profitability. The revenue growth rate is positive, which is a promising sign for the company’s sales trajectory.65
Positive
Balance Sheet
The balance sheet of KinderCare Learning Companies Inc reflects a high debt-to-equity ratio, indicating significant leverage that could pose financial risks if not managed properly. The equity ratio is moderate, showing a balanced but slightly weaker equity position compared to total assets. Return on equity has been declining, impacting shareholder value. Overall, the balance sheet highlights a need for better financial management to improve equity and reduce leverage.55
Neutral
Cash Flow
Cash flow analysis reveals a concerning trend of negative free cash flow, primarily due to higher capital expenditures than operating cash flow in recent periods. While operating cash flow remains positive, the ratio to net income indicates inefficiencies. The company needs to focus on improving free cash flow sustainability to support long-term operations and growth.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.99B | 2.66B | 2.51B | 2.17B | 1.81B | 1.37B |
| Gross Profit | 418.80M | 630.52M | 685.86M | 741.20M | 506.20M | 214.49M |
| EBITDA | 109.39M | 209.91M | 391.86M | 477.73M | 295.36M | 18.48M |
| Net Income | -98.47M | -92.84M | 102.56M | 219.17M | 88.41M | -129.50M |
Balance Sheet | ||||||
| Total Assets | 3.72B | 3.65B | 3.65B | 3.66B | 3.47B | 3.27B |
| Cash, Cash Equivalents and Short-Term Investments | 131.29M | 62.34M | 156.15M | 105.21M | 177.25M | 53.23M |
| Total Debt | 1.48B | 2.39B | 2.69B | 1.36B | 1.40B | 2.85B |
| Total Liabilities | 2.83B | 2.78B | 3.15B | 3.26B | 3.21B | 3.13B |
| Stockholders Equity | 884.88M | 864.51M | 506.88M | 407.69M | 255.61M | 136.28M |
Cash Flow | ||||||
| Free Cash Flow | 41.55M | -16.43M | 174.50M | 202.18M | 116.40M | -34.60M |
| Operating Cash Flow | 144.28M | 115.89M | 303.54M | 341.61M | 183.29M | 13.59M |
| Investing Cash Flow | -109.83M | -147.24M | -117.66M | -299.73M | -80.15M | -48.48M |
| Financing Cash Flow | 1.13M | -62.63M | -134.94M | -117.66M | 20.87M | 47.77M |
KinderCare Learning Companies Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.66B | 20.29 | 23.76% | ― | 14.90% | 60.56% | |
76 Outperform | $4.14B | 19.10 | 16.62% | ― | 13.10% | 127.72% | |
71 Outperform | $1.86B | 12.58 | 16.54% | 1.83% | 6.35% | 0.35% | |
70 Outperform | $1.72B | 30.41 | 21.81% | ― | 14.69% | 188.00% | |
69 Neutral | $1.89B | 16.79 | 6.86% | 3.06% | 5.72% | 11.02% | |
65 Neutral | $27.23B | 15.60 | -4.43% | 2.56% | 1.05% | 4.97% | |
55 Neutral | $1.18B | 35.79 | -13.54% | ― | 4.87% | -198.67% |
* Consumer Defensive Sector Average
Performance Comparison
KLC
KinderCare Learning Companies Inc
10.04
-18.00
-64.19%
PRDO
Perdoceo Education
28.45
4.14
17.03%
ATGE
Adtalem Global Education
115.12
36.39
46.22%
LRN
Stride
129.94
55.58
74.74%
STRA
Strategic Education
78.40
-37.34
-32.26%
UTI
Universal Technical Institute
31.54
12.40
64.79%
KinderCare Learning Companies Inc Corporate Events
Private Placements and Financing
KinderCare Announces Repricing Amendment to Credit Agreement
Neutral
Jul 3, 2025
KinderCare Learning Companies, Inc., through its subsidiary KUEHG Corp., has announced a repricing amendment to its credit agreement as of July 1, 2025. This amendment affects the interest rates on its first lien term loans and revolving credit facility, aligning them with Term SOFR plus specific percentages. The repricing also includes a reset of the soft call protection for certain transactions, while maintaining all other terms of the original credit agreement.
The most recent analyst rating on (KLC) stock is a Buy with a $31.00 price target. To see the full list of analyst forecasts on KinderCare Learning Companies Inc stock, see the KLC Stock Forecast page.
Executive/Board ChangesShareholder Meetings
KinderCare Announces Board Changes and Key Decisions
Neutral
Jun 9, 2025
On June 5, 2025, Preston Grasty resigned from the Board of Directors of KinderCare Learning Companies, Inc., with no disagreements cited. The same day, the company held its 2025 Annual Meeting of Stockholders, where key decisions included the election of Christine Deputy and Paul Thompson as Class I directors, the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm, and the approval of executive compensation. Additionally, stockholders voted for annual advisory votes on executive compensation.
The most recent analyst rating on (KLC) stock is a Buy with a $31.00 price target. To see the full list of analyst forecasts on KinderCare Learning Companies Inc stock, see the KLC Stock Forecast page.
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.