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Perdoceo Education (PRDO)
NASDAQ:PRDO
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Perdoceo Education
(NASDAQ:PRDO)
80Outperform
Positive Factors
Acquisition Impact
Perdoceo Education completed the acquisition of the University of St. Augustine for Health Sciences, expected to be immediately accretive to adjusted operating income beginning in 2025.
Financial Performance
Perdoceo Education reported financial results that topped estimates and initial 2025 guidance was above expectations.
Negative Factors
Revenue Decline
Revenue in the third quarter decreased 5.6% to $169.8 million due to lower revenue from CTU and AIUS, related to a lag impact from operational changes in the prior year.
Perdoceo Education (PRDO) vs. S&P 500 (SPY)
Market Cap
$1.66B
Dividend Yield1.97%
Average Volume (3M)529.34K
Price to Earnings (P/E)11.5
Beta (1Y)0.38
Revenue Growth-4.05%
EPS Growth1.50%
CountryUS
Employees5,690
SectorConsumer Cyclical
Sector Strength50
IndustryEducation
Share Statistics
EPS (TTM)2.20
Shares Outstanding65,914,276
10 Day Avg. Volume658,503
30 Day Avg. Volume529,343
Financial Highlights & Ratios
PEG Ratio7.68
Price to Book (P/B)N/A
Price to Sales (P/S)2.44
Price to Cash Flow (P/CF)23.60
P/FCF Ratio23.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$35.00Price Target Upside39.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Perdoceo Education Business Overview & Revenue Model
Company DescriptionPerdoceo Education Corp. engages in the provision of educational services. It operates through Colorado Technical University (CTU) and American InterContinental University (AIU) segments. The CTU segment offers academic programs in the disciplines of business studies, nursing, computer science, engineering, information systems and technology, cybersecurity, and healthcare management. The AIU segment provides academic programs in the disciplines of business studies, information technologies, education, and criminal justice. The company was founded by John M. Larson on January 5, 1994 and is headquartered in Schaumburg, IL.
How the Company Makes MoneyPerdoceo Education Corporation generates revenue primarily through tuition fees paid by students enrolled in its degree programs. The company offers a variety of financial aid options and scholarships to support student enrollment, which in turn drives its revenue streams. Additionally, Perdoceo may receive funding from federal financial aid programs, including Title IV funds, which are critical to its business model. The company also leverages partnerships with employers and industry organizations to enhance its educational offerings and attract more students, further contributing to its earnings.
Perdoceo Education Financial Statement Overview
Summary
Perdoceo Education shows strong financial health with stable revenue growth, high profitability margins, and a solid balance sheet with low financial risk. The company's robust cash flow generation supports its operations and growth opportunities.Income Statement
Perdoceo Education has demonstrated strong financial performance with consistent revenue growth over the past few years. The gross profit margin remains robust at 100% due to the absence of cost of goods sold reported. The net profit margin improved slightly despite a decrease in total revenue from the previous year, reflecting efficient cost management and operational efficiency. EBIT and EBITDA margins are healthy, indicating solid core business profitability.85
Very Positive
Balance Sheet
The company's balance sheet is strong, with a low debt-to-equity ratio, reflecting low leverage and financial stability. The return on equity is high, indicating effective utilization of shareholder capital to generate profits. The equity ratio is also healthy, emphasizing financial stability and a strong asset base compared to liabilities.90
Very Positive
Cash Flow
Perdoceo Education's cash flow is robust, with significant growth in free cash flow, driven by strong operating cash flow generation. The operating cash flow to net income and free cash flow to net income ratios are favorable, highlighting efficient cash generation from operations relative to net income.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 681.26M | 710.00M | 695.21M | 693.03M | 687.31M | Gross Profit |
| 681.26M | 579.68M | 578.49M | 584.29M | 575.55M | EBIT |
| 174.25M | 150.45M | 129.64M | 149.02M | 142.93M | EBITDA |
| 215.47M | 209.41M | 152.37M | 165.78M | 158.33M | Net Income Common Stockholders |
| 147.59M | 147.65M | 95.87M | 109.64M | 124.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 568.92M | 603.14M | 508.72M | 494.19M | 406.36M | Total Assets |
| 1.24B | 1.01B | 957.37M | 847.43M | 721.52M | Total Debt |
| 75.04M | 27.05M | 33.84M | 44.95M | 53.19M | Net Debt |
| -625.64M | -90.96M | -75.57M | -275.03M | -52.49M | Total Liabilities |
| 277.50M | 165.90M | 231.52M | 197.32M | 165.61M | Stockholders Equity |
| 959.54M | 841.42M | 725.85M | 650.11M | 555.91M |
| Cash Flow | Free Cash Flow | |||
| 156.97M | 105.61M | 135.57M | 180.66M | 170.19M | Operating Cash Flow |
| 161.59M | 112.03M | 148.19M | 191.12M | 179.96M | Investing Cash Flow |
| -107.78M | -88.51M | -326.75M | 54.32M | -165.91M | Financing Cash Flow |
| -41.08M | -23.38M | -27.73M | -29.95M | -13.05M |
Perdoceo Education Technical Analysis
Negative
25.17
Price Trends
26.87
Negative
25.94
Negative
23.90
Positive
Market Momentum
-0.69
Positive
31.13
Neutral
44.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRDO, the sentiment is Negative. The current price of 25.17 is below the 20-day moving average (MA) of 26.15, below the 50-day MA of 26.87, and above the 200-day MA of 23.90, indicating a neutral trend. The MACD of -0.69 indicates Positive momentum. The RSI at 31.13 is Neutral, neither overbought nor oversold. The STOCH value of 44.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRDO.
Perdoceo Education Risk Analysis
Perdoceo Education disclosed 28 risk factors in its most recent earnings report. Perdoceo Education 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
Perdoceo Education Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.66B | 11.54 | 16.39% | 1.97% | -4.05% | 1.50% | |
78 Outperform | $3.49B | 17.46 | 14.63% | ― | 12.83% | 97.16% | |
74 Outperform | $2.88B | 9.83 | 30.98% | ― | 5.55% | 185.01% | |
70 Outperform | $4.83B | 21.72 | 30.13% | ― | 7.50% | 13.70% | |
68 Neutral | $1.96B | 17.65 | 6.80% | 2.91% | 7.68% | 61.28% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% | |
47 Neutral | $81.13M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Consumer Cyclical Sector Average
Performance Comparison
PRDO
Perdoceo Education
24.34
6.95
39.97%
ATGE
Adtalem Global Education
95.27
45.28
90.58%
LOPE
Grand Canyon Education
168.57
35.60
26.77%
STRA
Strategic Education
79.91
-20.32
-20.27%
CHGG
Chegg
0.86
-7.17
-89.29%
LAUR
Laureate Education
18.74
5.09
37.29%
Perdoceo Education Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -12.18% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with strategic growth through acquisitions and improved student engagement metrics. Despite a year-over-year revenue decline, the company achieved significant enrollment growth and operating income. The acquisition of St. Augustine is expected to further enhance future performance. However, potential challenges from changes in student loan initiatives were noted.Highlights
Acquisition of University of St. Augustine
Successfully completed the acquisition of the University of St. Augustine for Health Sciences, expanding into the health sciences field and expected to be accretive to operating income in 2025 and 2026.
Enrollment Growth
Total student enrollments increased by 8.1% at CTU and 11.8% at AIU System, driven by strong student retention, engagement, and increased levels of prospective student interest.
Record Operating Income
Full-year operating income of $174.3 million was $23.8 million higher compared to the prior year, with adjusted operating income increasing by 9.9%.
Shareholder Returns
Returned $38.5 million to shareholders through dividends and stock buybacks, with an expected continued focus on returning cash to shareholders.
Fourth Quarter Revenue Growth
Fourth quarter revenue increased by 12.5%, driven by strong student retention and engagement.
Lowlights
Decline in Full-Year Revenue
Full-year revenue decreased by $28.7 million, primarily due to operational changes at AIU System and changes within CTU's professional development offerings.
Expected Headwinds from Student Loan Initiatives
Anticipated challenges due to changes or ending of Department of Education student loan initiatives, potentially impacting future enrollment.
Company Guidance
During the fourth quarter and full-year 2024 earnings call, Perdoceo Education Corporation provided guidance on various metrics for 2025. They reported a net income of $31.5 million for the fourth quarter, with adjusted earnings per diluted share at $0.50. For the full year, net income was $147.6 million, translating to $2.19 per diluted share, and adjusted earnings per share reached $2.29. The company highlighted strong enrollment growth, with total student enrollments increasing by 8.1% at CTU and 11.8% at AIU System, leading to an overall revenue increase in the fourth quarter. They announced a strategic acquisition of the University of St. Augustine for Health Sciences, which is expected to be accretive to operating income in 2025, contributing to a projected adjusted operating income range of $215 million to $235 million. Anticipated revenue growth is underpinned by sustained student retention and engagement, with expectations of further increase in corporate engagements and prospective student interest. The company also returned $38.5 million to shareholders through dividends and stock buybacks in 2024 and has plans to continue dividends as part of their capital allocation strategy.Perdoceo Education Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Perdoceo Education Expands Board with Strategic Appointment
Positive
Feb 7, 2025
On February 3, 2025, Perdoceo Education Corporation expanded its Board of Directors from eight to nine members, appointing Hanna Skandera to fill the new position. Skandera, known for her leadership in education and policy, brings extensive experience to the board, having previously served in various high-profile education roles, including as Secretary of Education in New Mexico. Her appointment is seen as a strategic move to strengthen the company’s board with her insights and expertise, potentially impacting its operations and positioning in the education sector.
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.