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Lincoln Educational Services Corp. (LINC)
NASDAQ:LINC
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Lincoln Edu
(NASDAQ:LINC)
57Neutral
Positive Factors
Expansion Plans
Lincoln plans to open 1-2 campuses per year for the next 5 years, with new campuses expected in Levittown, PA; Nashville, TN; and Houston, TX in 2025.
Financial Performance
Q4/25 results top consensus: Revenue increased 16.4% to $119.4 million due to a 13.7% increase in average student population and tuition increases.
Market Outlook
Management remains confident it can grow its top line 10%+ for each of the next three years, supported by program and campus expansions and a healthy macro environment.
Negative Factors
Cash Flow Concerns
The company will be FCF negative in 2025 due to investments but expects to reach FCF breakeven to slightly positive in 2026 and positive in 2027 as new campuses scale into profitability.
Valuation
The stock is trading at a small premium to its for-profit postsecondary education peer group but at a discount to its closest trade school comp, Universal Technical Institute.
Lincoln Edu (LINC) vs. S&P 500 (SPY)
Market Cap
$484.00M
Dividend YieldN/A
Average Volume (3M)260.27K
Price to Earnings (P/E)48.3
Beta (1Y)1.12
Revenue Growth16.40%
EPS Growth-62.64%
CountryUS
Employees1,875
SectorConsumer Cyclical
Sector Strength61
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.32
Shares Outstanding31,592,808
10 Day Avg. Volume250,372
30 Day Avg. Volume260,268
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.08
Price to Cash Flow (P/CF)3.90
P/FCF Ratio3.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.50Price Target Upside46.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Lincoln Edu Business Overview & Revenue Model
Company DescriptionLincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates in two segments: Transportation and Skilled Trades, and Healthcare and Other Professions. It offers associate's degree, and diploma and certificate programs in automotive technology; skilled trades programs, including electrical, heating and air conditioning repair, welding, computerized numerical control, and electrical and electronic systems technology; health science programs comprising nursing, dental and medical assistant, claim examiner, medical administrative assistant, etc.; hospitality services programs, such as culinary, therapeutic massage, cosmetology, and aesthetics; and information technology programs. The company operates 22 schools in 14 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, Euphoria Institute of Beauty Arts and Sciences, and other brand names. As of December 31, 2021, it had 13,059 students enrolled at 22 campuses. The company was founded in 1946 and is based in Parsippany, New Jersey.
How the Company Makes MoneyLincoln Educational Services Corporation generates revenue primarily through tuition fees paid by students enrolled in its various programs. These fees are collected at the start of each term or course cycle. The company also benefits from additional revenue streams such as federal financial aid programs, including grants and loans, which are utilized by a significant portion of its student base. Furthermore, Lincoln Edu often engages in partnerships with industry leaders and employers to enhance its curriculum and improve job placement rates for graduates, thereby attracting more students and increasing enrollment. Ancillary services, like on-campus housing and other student-related services, may also contribute to its earnings.
Lincoln Edu Financial Statement Overview
Summary
Lincoln Edu demonstrates promising revenue growth but faces challenges in profitability and cash flow management. The recent financial data suggests potential structural changes or reporting issues with balance sheet figures. While operationally efficient, the company needs to address cash flow sustainability and verify financial structuring to ensure long-term stability.Income Statement
Lincoln Edu has shown a positive trajectory in revenue growth over the years, with a revenue increase from $273.3M in 2019 to $440.1M in 2024. However, the gross profit margin is lower due to the most recent year having high revenue but not a corresponding increase in gross profit. The net profit margin has declined significantly from previous years, indicating challenges in maintaining profitability. Stability in EBIT and EBITDA margins suggests operational efficiency despite profitability concerns.65
Positive
Balance Sheet
The balance sheet reflects a stable asset base, but the complete absence of liabilities and equity in the latest year raises concerns about the accuracy or financial structuring. The past trend showed a healthy decreasing debt-to-equity ratio and improving equity ratio, but current data is insufficient for a comprehensive analysis of financial health.50
Neutral
Cash Flow
Free cash flow has been negative in recent years, indicating potential liquidity issues. Despite a positive operating cash flow, the significant capital expenditures have led to cash flow challenges. The free cash flow to net income ratio is unfavorable, suggesting inefficiencies in converting net income to cash.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 440.06M | 378.07M | 348.29M | 335.34M | 293.10M | Gross Profit |
| 258.31M | 215.79M | 199.54M | 196.41M | 170.90M | EBIT |
| 15.18M | 33.36M | 11.11M | 20.34M | 7.30M | EBITDA |
| 28.61M | 42.76M | 23.51M | 56.40M | 22.18M | Net Income Common Stockholders |
| 9.89M | 26.00M | 12.63M | 34.72M | 48.56M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 59.27M | 75.99M | 60.83M | 83.31M | 38.03M | Total Assets |
| 436.56M | 345.25M | 291.57M | 295.30M | 245.19M | Total Debt |
| 177.56M | 116.79M | 100.63M | 97.89M | 78.42M | Net Debt |
| 118.29M | 40.79M | 54.56M | 14.58M | 40.39M | Total Liabilities |
| 258.29M | 178.44M | 146.69M | 165.88M | 154.12M | Stockholders Equity |
| 178.26M | 166.80M | 144.88M | 129.42M | 91.07M |
| Cash Flow | Free Cash Flow | |||
| -27.56M | -15.14M | -8.10M | 19.92M | 17.91M | Operating Cash Flow |
| 29.31M | 25.56M | 882.00K | 27.45M | 23.48M | Investing Cash Flow |
| -46.97M | 7.37M | -21.35M | 37.85M | -5.48M | Financing Cash Flow |
| -3.33M | -2.94M | -12.55M | -20.01M | -18.62M |
Lincoln Edu Technical Analysis
Negative
15.32
Price Trends
16.51
Negative
16.15
Negative
14.27
Positive
Market Momentum
-0.21
Negative
51.41
Neutral
66.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LINC, the sentiment is Negative. The current price of 15.32 is below the 20-day moving average (MA) of 15.53, below the 50-day MA of 16.51, and above the 200-day MA of 14.27, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 51.41 is Neutral, neither overbought nor oversold. The STOCH value of 66.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LINC.
Lincoln Edu Risk Analysis
Lincoln Edu disclosed 38 risk factors in its most recent earnings report. Lincoln Edu reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lincoln Edu Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.76B | 18.27 | 14.63% | ― | 12.83% | 97.16% | |
72 Outperform | $5.03B | 21.61 | 30.13% | ― | 7.50% | 13.70% | |
68 Neutral | $395.73M | 40.44 | 5.41% | ― | 4.00% | ― | |
68 Neutral | $2.03B | 17.62 | 6.80% | 2.92% | 7.68% | 61.28% | |
59 Neutral | $11.22B | 10.13 | -1.22% | 3.96% | 1.32% | -18.57% | |
57 Neutral | $484.00M | 48.25 | 5.73% | ― | 16.40% | -62.64% | |
45 Neutral | $59.51M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Consumer Cyclical Sector Average
Performance Comparison
LINC
Lincoln Edu
15.32
5.20
51.38%
APEI
American Public Education
21.99
8.85
67.35%
ATGE
Adtalem Global Education
98.02
48.43
97.66%
LOPE
Grand Canyon Education
167.21
35.46
26.91%
STRA
Strategic Education
81.07
-20.77
-20.39%
CHGG
Chegg
0.51
-6.71
-92.94%
Lincoln Edu Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -4.79% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call was predominantly positive, highlighting strong revenue growth, successful new campus launches, and promising guidance for the next year. However, there were concerns about declining starts in specific sectors and regulatory challenges. The positive aspects of the company's performance and strategic outlook significantly outweigh the lowlights.Highlights
Record Revenue Growth
For the fourth quarter, total revenue grew by $16.9 million or 16.4% to $119.4 million, driven by a student population growth of 13.7% and tuition increases.
Strong Student Enrollment
Student starts grew nearly 10% in Q4 and 15.2% for the full year, marking nine consecutive quarters of start growth.
New Campus Success
The new Eastpointe campus in Atlanta exceeded projections, contributing $6 million more in revenue and $2 million more in EBITDA than expected.
Profitable Growth Initiatives
Adjusted EBITDA increased 60% to $42.3 million for the full year. The company opened new campuses and expanded high-demand programs.
Strong Cash Flow and No Debt
The company generated $30 million in cash flow from operations in Q4, ending the year with nearly $60 million in cash and no debt.
Positive Guidance for 2025
Revenue is expected to grow to $480 million - $490 million, with adjusted EBITDA projected at $55 million - $60 million.
Lowlights
Decline in Healthcare and Other Professions
Starts in healthcare and other professions were down 17% in Q4, influenced by program exits and delays in nursing program approvals.
Program Closures
The company exited cosmetology, culinary, massage therapy, and some IT programs, shifting focus to higher ROI programs.
Regulatory Challenges
Potential delays in Department of Education approvals could impact funding and program expansions.
Company Guidance
During the Q4 2024 earnings call, Lincoln Educational Services provided a robust outlook for the future, highlighting several key metrics. The company achieved a 16% revenue growth in the fourth quarter and a 10% increase in student starts, leading to a 14% rise in the student population by quarter's end. They reported $30 million in cash flow from operations and ended the year with $60 million in cash and no debt. For 2025, Lincoln projects revenue between $480 million and $490 million, adjusted EBITDA of $55 million to $60 million, and student start growth of 8% to 12%. The company's strategic growth plan aims for $550 million in revenue and $90 million in adjusted EBITDA by 2027, driven by the expansion of their Lincoln 10.0 hybrid teaching model and new campus development.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.