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Legacy Education Inc. (LGCY)
:LGCY
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Legacy Education Inc.
(LGCY)
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Rating:74Outperform
Price Target:
$15.50
▲(11.59% Upside)
Action:UpgradedDate:02/13/26
The score is driven primarily by solid financial performance and a notably strong, growth- and margin-positive earnings call with a healthy balance sheet. Technicals are supportive but not decisive, while valuation appears moderate with no dividend yield data to add support.
Positive Factors
Sustained Revenue Growth
Fourteen consecutive quarters of double-digit revenue growth signals durable product-market fit and scalable enrollment-driven dynamics. Consistent top-line expansion supports reinvestment in programs, increases bargaining power with partners, and underpins multi-quarter planning for campus rollouts and M&A integration.
Margin Expansion & Profitability
Meaningful EBITDA and margin expansion reflect operating leverage as enrollment scales and program mix improves. Higher margins increase free cash flow potential and give management flexibility to fund accretive acquisitions, invest in hybrid delivery, and absorb modest cost inflation without structural margin erosion.
Strong Liquidity & Low Leverage
A healthy cash position, strong working capital and minimal long-term debt afford durable financial flexibility for program expansion, hybrid delivery investment, and selective acquisitions. This balance sheet profile reduces refinancing risk and supports multi-quarter execution even if cash timing fluctuates.
Negative Factors
Rising AR Reserves
A higher AR reserve signals weaker collectability or more conservative recognition, which can persistently compress cash conversion and working capital. For an education business reliant on tuition cash flows and Title IV timing, elevated reserves reduce available liquidity and can increase funding needs for growth or acquisitions.
Rising G&A and Bad Debt
Structural increases in G&A and persistent bad debt at roughly 5% of revenue can limit sustainable margin gains from scale. If these cost pressures continue, management must improve collections, optimize SG&A, or accept lower long-term margins, which could constrain free cash flow growth and M&A firepower.
Cash-Flow Timing Sensitivity & Volatility
Reliance on Title IV disbursement timing and performance pay introduces persistent quarter-to-quarter cash volatility, complicating working capital management and the timing of investments or acquisitions. Such structural timing sensitivity raises execution risk for multi-quarter strategic initiatives.
Legacy Education Inc. (LGCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$175.20M
Dividend YieldN/A
Average Volume (3M)80.09K
Price to Earnings (P/E)15.7
Beta (1Y)1.04
Revenue Growth40.14%
EPS Growth16.61%
CountryUS
Employees195
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding12,613,086
10 Day Avg. Volume108,308
30 Day Avg. Volume80,095
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)3.15
Price to Sales (P/S)2.02
P/FCF Ratio18.70
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.88
Enterprise Value/Gross Profit6.64
Enterprise Value/Ebitda16.24
Forecast
1Y Price Target
$14.30Price Target Upside2.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.67
Revenue Forecast (FY)$78.23M
Legacy Education Inc. Business Overview & Revenue Model
Company DescriptionLegacy Education Inc. provides education services to students, high school graduates, and working parents in the United States. The company offers a range of certificate or degree programs, including ultrasound technician (UT), vocational nursing (VN), VN Associate of Applied Science degree, Associate degree of nursing, nursing assistant, magnetic resonance imaging (MRI) Associate of Applied Science, cardiac sonography, pharmacy technician, dental assisting, clinical medical assisting, medical administrative assisting, medical billing and coding, and veterinary assistant. It also provides a range of certificate or degree programs, such as phlebotomy technician avocational, nursing assistant avocational, UT Associate of Applied Science degree, business administrative specialist, computer specialist, accounting, medical administrative assistant, medical assisting, veterinary technology Associate of Applied Science, avocational phlebotomy technician program, registered nurse to Bachelor of Science in nursing, and diagnostic medical sonography program. The company operates under the High Desert Medical College, Central Coast College, and Integrity College of Health academic institutions. Legacy Education Inc. was incorporated in 2020 and is based in Temecula, California.
How the Company Makes MoneyLegacy Education Inc. generates revenue through multiple channels, primarily by selling educational courses and training programs. Their revenue model includes tuition fees from in-person and online seminars, workshops, and coaching sessions. The company may also earn income from the sale of related educational materials and resources. Additionally, partnerships with real estate professionals and industry experts can enhance their offerings and attract more customers, contributing to overall revenue growth. The company's ability to attract and retain students through effective marketing strategies and high-quality educational content plays a crucial role in its financial performance.
Legacy Education Inc. Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 14, 2026
Earnings Call Sentiment Positive
The call emphasized robust top-line growth (Q2 revenue +40.7%), strong margin and profitability expansion (substantial Adjusted EBITDA and EPS gains), program expansion, accreditation successes, and a solid balance sheet (cash $21.1M, low debt). Operational innovations (hybrid delivery, AI integration) and a healthy M&A pipeline further support the growth outlook. Headwinds noted were manageable: higher AR reserves due to timing, increased G&A and bad debt, some cost pressures (non-cash comp, excursion fees), and a modest rise in the effective tax rate. Overall, positives substantially outweigh the few operational and timing-related challenges.Q2-2026 Updates
Positive Updates
Strong Revenue Growth
Q2 revenue increased 40.7% year-over-year to $19.2M, marking the company's fourteenth consecutive quarter of double-digit revenue growth. Year-to-date revenue grew 39.6% to $38.6M.
Margin Expansion and Profitability
Adjusted EBITDA rose materially (CFO reported +61.6% to $3.3M year-over-year for the quarter) with Adjusted EBITDA margin expanding to 15.8% from 13.7% a year ago. Q2 EBITDA increased 54.8% to $2.7M.
Net Income and EPS Improvement
Net income grew 46% year-over-year to $2.0M in Q2 and diluted EPS increased 50% to $0.15 from $0.10. For the six months ended 12/31/2025, net income rose 21.2% to $4.2M and diluted EPS was $0.30 (vs $0.29).
Enrollment and Student Starts Momentum
Ending student population increased 6.8% to 3,234. New student starts for the quarter rose 49.4% to 593 (YTD starts up 37.2% to 1,710), driving top-line growth.
Strong Balance Sheet and Cash Position
Cash of $21.1M, working capital in excess of $27.0M, minimal debt of $0.6M, and positive operating cash flow of $2.1M provide flexibility to invest and pursue M&A.
Program Expansion and Accreditation Wins
Launched MRI program (33 new starts); received accreditation approval for a fourth sterile processing program and began enrollments across four campuses; surgical technology and cardiac sonography programs rolling out; Integrity campus received a six-year reaccreditation (longest grant awarded). Contra Costa Medical Career College integration complete with enrollment topping 500.
Delivery Innovation and Faculty Investment
Hybrid delivery model introduced at Contra Costa enabling additional cohort starts; faculty invested focused development days and the company is integrating AI-enabled tools to support instruction, administrative efficiency, and consistent course design.
Active M&A Pipeline and Leadership Reinforcement
Management reports a robust acquisition pipeline (in-state and adjacent markets) with an intent to announce an accretive deal within the fiscal year; hired Joe Bartolome to oversee scalable operations and integrations.
Negative Updates
Increase in AR Reserve
Accounts receivable reserve increased to 11.5% of AR from 9.5% last quarter, reflecting a change in reserve methodology (quarterly analysis) and timing of write-offs — a potential sign of receivables timing/collection variability.
Rising G&A and Bad Debt Pressure
General & administrative expenses increased to 31.7% of revenue YTD (from 30.1% last year), driven by higher professional fees, facilities, and bad debt. Bad debt expense was noted as increasing (and remains roughly ~5% of revenue).
Higher Effective Tax Rate
Effective tax rate rose to 28.9% in Q2 from 27.3% last year due to lower stock option exercise-related tax benefits; management notes annual rate excluding such benefits is ~29.6% and can fluctuate with timing of option exercises.
Rising Non-Cash Compensation and Program-Related Costs
Educational services cost drivers include increases in non-cash compensation and excursion fees; educational services as a percent of revenue was 53.4% YTD (slightly above last year's 53.1%), indicating some cost pressure even as unit economics improve.
Operating Cash Flow Timing Sensitivity
Operating cash flow remained positive but is subject to timing effects from Title IV disbursements and performance-based compensation, which can create quarter-to-quarter volatility in cash generation.
Company Guidance
Management guided to continued enrollment-driven growth and margin expansion as it scales four new allied‑health programs, advances hybrid delivery, and pursues at least one acquisition before year‑end; key metrics cited include Q2 revenue up 40.7% to $19.2M (14th consecutive quarter of double‑digit growth), Q2 adjusted EBITDA +61.6% to $3.3M (adjusted EBITDA margin 15.8% vs. 13.7 LY), EBITDA $2.7M (+54.8%), net income $2.0M (+46%) or $0.15 diluted EPS (vs. $0.10), ending population +6.8% to 3,234, Q2 new student starts +49.4% to 593 (YTD starts +37.2% to 1,710), six‑month revenue +39.6% to $38.6M with six‑month adjusted EBITDA $6.1M (+30.3%), cash $21.1M, working capital >$27M, debt $0.6M, operating cash flow $2.1M, AR reserve 11.5% (vs. 9.5% last quarter), bad debt ~5% of revenue, effective tax rate Q2 28.9% (YTD 27.7%; annual excl. stock benefits 29.6%), cohort sizes typically 20–30 (MRI launched with 33), Contra Costa enrollment >500, and Integrity campus granted a six‑year reaccreditation.Legacy Education Inc. Financial Statement Overview
Summary
Strong profitability and improving cash generation support the score (gross margin 45.94%, net margin 11.74%, free cash flow growth 132.73%). Balance sheet leverage is conservative (debt-to-equity 0.43), but prior revenue/cash-flow volatility and rising debt trend noted in the statements temper the rating.Income Statement
Legacy Education Inc. has demonstrated strong revenue growth with an 8.81% increase in the latest year, indicating a positive trajectory. The gross profit margin of 45.94% and net profit margin of 11.74% reflect solid profitability. The EBIT and EBITDA margins are also healthy at 17.35% and 18.04%, respectively, showcasing efficient operations. However, the company experienced a significant revenue drop in 2022, which could indicate potential volatility.75
Positive
Balance Sheet
The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.43, suggesting a conservative leverage approach. The return on equity is strong at 18.36%, indicating effective use of equity to generate profits. The equity ratio of 59.30% reflects a solid equity base relative to total assets. However, the increase in total debt over the years requires monitoring to ensure it remains sustainable.70
Positive
Cash Flow
Legacy Education Inc. has shown impressive free cash flow growth of 132.73%, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 0.56 suggests that cash flows are adequately supporting net income. The free cash flow to net income ratio of 0.89 is robust, reflecting efficient cash conversion. However, the company has experienced fluctuations in cash flow metrics in previous years, which could pose risks.68
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 58.97M | 64.17M | 46.00M | 35.46M | 30.70M | 57.81M |
| Gross Profit | 25.54M | 29.48M | 19.65M | 35.23M | 12.59M | 30.06M |
| EBITDA | 10.44M | 11.58M | 7.37M | 4.19M | 3.67M | 12.46M |
| Net Income | 19.18M | 7.53M | 5.11M | 2.67M | 2.34M | 9.61M |
Balance Sheet | ||||||
| Total Assets | 67.10M | 69.21M | 35.17M | 27.25M | 20.61M | 17.95M |
| Cash, Cash Equivalents and Short-Term Investments | 17.33M | 20.32M | 10.38M | 9.29M | 8.77M | 7.85M |
| Total Debt | 17.54M | 17.68M | 4.84M | 5.56M | 953.24K | 1.10M |
| Total Liabilities | 27.82M | 28.16M | 12.75M | 11.82M | 7.01M | 6.95M |
| Stockholders Equity | 39.28M | 41.04M | 22.42M | 15.42M | 13.60M | 11.00M |
Cash Flow | ||||||
| Free Cash Flow | 2.98M | 6.92M | 1.23M | 1.57M | 793.73K | 4.64M |
| Operating Cash Flow | 3.74M | 7.77M | 1.65M | 1.77M | 1.09M | 4.84M |
| Investing Cash Flow | -6.90M | -6.98M | -423.71K | -195.08K | -294.87K | -199.59K |
| Financing Cash Flow | 9.07M | 9.15M | -238.55K | -1.05M | 129.03K | 1.79M |
Legacy Education Inc. Technical Analysis
Positive
13.89
Price Trends
11.12
Positive
10.33
Positive
10.66
Positive
Market Momentum
0.99
Negative
73.35
Negative
79.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGCY, the sentiment is Positive. The current price of 13.89 is above the 20-day moving average (MA) of 12.51, above the 50-day MA of 11.12, and above the 200-day MA of 10.66, indicating a bullish trend. The MACD of 0.99 indicates Negative momentum. The RSI at 73.35 is Negative, neither overbought nor oversold. The STOCH value of 79.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LGCY.
Legacy Education Inc. Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $175.20M | 15.68 | 20.06% | ― | 40.14% | 16.61% | |
68 Neutral | $59.81M | 1.53 | 51.70% | ― | -0.84% | -11.01% | |
67 Neutral | $97.08M | 2.45 | 11.71% | 3.93% | -8.09% | -15.28% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
59 Neutral | $61.48M | 17.38 | 49.19% | ― | 12.19% | 72.87% | |
42 Neutral | $40.11M | -0.69 | -215.67% | ― | -3.55% | 61.83% | |
40 Underperform | $37.47M | -1.90 | -62.24% | ― | -64.39% | -305.82% |
* Consumer Defensive Sector Average
LGCY
Legacy Education Inc.
13.89
7.24
108.87%
STG
Sunlands Online Education Group
4.46
-0.78
-14.82%
SKIL
Skillsoft
4.58
-14.59
-76.11%
IH
iHuman
1.90
-0.27
-12.44%
GNS
Genius Group Limited
0.46
0.16
52.67%
LFS
LEIFRAS Co., Ltd. Sponsored ADR
2.35
-1.85
-44.05%
Legacy Education Inc. Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Legacy Education releases updated investor presentation materials
Neutral
Jan 7, 2026
On January 7, 2026, Legacy Education Inc. prepared a new set of investor presentation materials for use by management in ongoing discussions about the company’s operations and performance, and made these materials publicly available through a regulatory filing. The company emphasized that the presentation is summary in nature, should be read alongside its broader securities filings and public disclosures, and reflects information only as of the filing date, while expressly stating it has no obligation to update the materials for future events or circumstances, underscoring a controlled and limited-disclosure approach for investors and other stakeholders.
The most recent analyst rating on (LGCY) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Legacy Education Inc. stock, see the LGCY Stock Forecast page.
Executive/Board ChangesShareholder Meetings
Legacy Education Inc. Holds Annual Shareholder Meeting
Neutral
Dec 16, 2025
On December 16, 2025, Legacy Education Inc. held its annual meeting of shareholders, where key decisions were made regarding the company’s leadership and financial oversight. Shareholders re-elected six directors to the board and ratified the appointment of L J Soldinger Associates, LLC as the independent registered public accounting firm for the fiscal year ending June 30, 2026. These decisions are crucial for maintaining continuity in the company’s governance and ensuring robust financial auditing practices.
The most recent analyst rating on (LGCY) stock is a Buy with a $14.40 price target. To see the full list of analyst forecasts on Legacy Education Inc. stock, see the LGCY 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.