KinderCare Learning Companies Inc (KLC) AI Stock Analysis

• Market Cap: $846.94M
• Dividend Yield: N/A
• Average Volume (3M): 839.99K
• Price to Earnings (P/E): 35.8
• Beta (1Y): 1.06
• Revenue Growth: 3.85%
• EPS Growth: -208.51%
• Country: US
• Employees: 43,690
• Sector: Consumer Defensive
• Sector Strength: 58
• Industry: Education & Training Services
• EPS (TTM): 0.22
• Shares Outstanding: 118,123,100
• 10 Day Avg. Volume: 1,619,385
• 30 Day Avg. Volume: 839,987
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 4.22
• Enterprise Value/Revenue: 1.33
• Enterprise Value/Gross Profit: 5.81
• Enterprise Value/Ebitda: 16.75
• 1Y Price Target: $12.63
• Price Target Upside: 86.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 52 Neutral
• Price Target: $7.50 ▲(10.46% Upside)

KinderCare Learning Companies Inc faces significant challenges, particularly in financial stability and technical performance. The stock is currently in a bearish trend, with negative valuation metrics and operational challenges highlighted in the earnings call. While there are some positive growth prospects, immediate risks and financial weaknesses weigh heavily on the overall score.

Positive Factors

Expansion Strategy

KinderCare expects to continue its center expansion strategy with acquisitions and new center openings without heavily relying on debt, improving its financial flexibility.

Market Position

As the largest childcare provider in the U.S., KLC should benefit from this scale in such areas as recruiting teachers and children.

Tax Incentives

The 45F tax credit is seen as a potential positive for the industry and particularly beneficial for KLC.

Negative Factors

Enrollment Decline

The enrollment decline was worse than expected and management attributed it to center level and local market specific with more support and action needed with a March restructuring in place.

Financial Performance

KLC's results were considered disappointing as enrollment was lighter-than-expected, leading to a revenue, EBITDA, and EPS miss.

Market Trends

Enrollment challenges are seen across the child care industry, reflected by delayed start dates for new families.

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 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 Money

KinderCare 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 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.

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.

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.

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	616.33M	630.52M	685.86M	741.20M	506.20M	214.49M
EBITDA	213.62M	209.91M	391.86M	477.73M	295.36M	18.48M
Net Income	-59.88M	-92.84M	102.56M	219.17M	88.41M	-129.50M
Balance Sheet
Total Assets	3.79B	3.65B	3.65B	3.66B	3.47B	3.27B
Cash, Cash Equivalents and Short-Term Investments	119.03M	62.34M	156.15M	105.21M	177.25M	53.23M
Total Debt	2.47B	2.39B	2.69B	2.86B	2.89B	2.85B
Total Liabilities	2.87B	2.78B	3.15B	3.26B	3.21B	3.13B
Stockholders Equity	924.28M	864.51M	506.88M	407.69M	255.61M	136.28M
Cash Flow
Free Cash Flow	42.22M	-16.43M	174.50M	202.18M	116.40M	-34.60M
Operating Cash Flow	179.32M	115.89M	303.54M	341.61M	183.29M	13.59M
Investing Cash Flow	-153.63M	-147.24M	-117.66M	-299.73M	-80.15M	-48.48M
Financing Cash Flow	-2.37M	-62.63M	-134.94M	-117.66M	20.87M	47.77M

KinderCare Learning Companies Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.79
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 6.79 is below the 20-day moving average (MA) of 8.88, below the 50-day MA of 9.49, and below the 200-day MA of 15.41, indicating a bearish trend. The MACD of -0.79 indicates Positive momentum. The RSI at 21.95 is Positive, neither overbought nor oversold. The STOCH value of 7.30 is Positive, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRDO	78 Outperform	$2.11B	14.10	16.39%	1.56%	15.99%	13.25%
STRA	76 Outperform	$1.90B	16.51	6.89%	3.02%	4.31%	-1.08%
ATGE	72 Outperform	$4.65B	21.06	16.60%	―	12.85%	81.69%
LRN	72 Outperform	$7.14B	27.14	21.69%	―	17.90%	39.75%
UTI	71 Outperform	$1.43B	22.91	23.11%	―	14.56%	127.02%
Sector *	63 Neutral	$20.91B	14.58	-4.08%	3.07%	2.70%	-8.71%
KLC	52 Neutral	$846.94M	35.79	-10.31%	―	3.85%	-208.51%

KinderCare Learning Companies Inc Corporate Events

KinderCare Announces Repricing Amendment to Credit Agreement

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.

KinderCare Announces Board Changes and Key Decisions

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.