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Perdoceo Education Corporation (PRDO)
:PRDO

Perdoceo Education (PRDO) AI Stock Analysis

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Perdoceo Education

(NASDAQ:PRDO)

Rating:77Outperform
Price Target:
Perdoceo Education's strong financial performance, marked by consistent revenue and profit growth and robust cash flow, is the primary driver of its favorable stock score. Technical indicators support bullish momentum, though caution is advised due to overbought signals. Valuation metrics suggest the stock is fairly priced, with a modest dividend yield. Positive earnings guidance and strategic board appointments further enhance the company's outlook, despite some challenges in specific segments.
Positive Factors
Financial Performance
Recent results top expectations with revenues and adjusted operating income exceeding estimates and management guidance.
Growth Prospects
Management expects organic revenue and total enrollment to increase in each of the remaining quarters of 2025.
Strategic Acquisitions
The acquisition of University of St. Augustine for Health Sciences is accretive to the company's performance.
Negative Factors
Peer Comparison
Perdoceo's shares trade at a significant discount to its peer group, with a raised price target of $38, indicating approximately 50% upside.
Valuation Concerns
Perdoceo's shares trade at a significant discount to its postsecondary education peer group average, offering attractive valuation.

Perdoceo Education (PRDO) vs. SPDR S&P 500 ETF (SPY)

Perdoceo Education Business Overview & Revenue Model

Company DescriptionPerdoceo Education Corporation (PRDO) is a provider of postsecondary education primarily in the United States. The company operates through two main institutions: Colorado Technical University (CTU) and the American InterContinental University (AIU). These institutions offer a variety of undergraduate, graduate, and doctoral degree programs, both online and on campus, catering to a diverse student body. The company's mission is to provide accessible, flexible, and career-focused education that meets the needs of adult learners and professionals seeking to advance their careers.
How the Company Makes MoneyPerdoceo Education Corporation generates revenue primarily through tuition fees paid by students enrolled in its degree programs. The company offers financial aid options to eligible students, including federal financial aid programs, which constitute a significant portion of its revenue. Additionally, Perdoceo may receive revenue from corporate partnerships and alliances that provide tailored educational programs for employees. The company's focus on online education allows it to reach a broader audience and maintain a scalable cost structure, enhancing its revenue potential. It also invests in marketing and recruitment efforts to attract and retain students, further driving its financial performance.

Perdoceo Education Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 27.72%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The call highlighted strong revenue growth and increased earnings, driven by the St. Augustine acquisition and enrollment growth at CTU. However, challenges such as declining enrollments at AIUS and increased marketing expenses were noted. The overall sentiment is positive due to the significant revenue and earnings growth.
Q1-2025 Updates
Positive Updates
Net Income and Earnings Per Share Increase
First quarter net income was $43.7 million or $0.65 per diluted share, compared to $39.4 million or $0.59 per diluted share in the previous year. Adjusted earnings per diluted share was $0.70, up from $0.60.
Revenue Growth
First quarter revenue increased by 26.6% to $213 million, compared to $168.3 million in the prior year quarter. This growth was supported by the St. Augustine acquisition and organic growth at CTU.
St. Augustine Acquisition Impact
The acquisition of St. Augustine contributed $39.2 million to revenue and is expected to positively impact operating income growth in 2025 and beyond.
Enrollment Increase at CTU
Total enrollments at CTU increased by 10.6% compared to the prior year, driven by high levels of student retention and engagement.
Capital Return to Shareholders
The company returned $34.4 million to shareholders through dividends and stock repurchases, buying back 985,000 shares during the quarter.
Negative Updates
Decline in AIUS Enrollments
AIUS reported a 4.5% decrease in total student enrollments compared to the prior year quarter, although growth is expected in the second quarter.
Flat Revenue at AIU System
First quarter revenue at AIU System was relatively flat compared to the prior year quarter, despite a 28% increase in operating income due to lower operating expenses.
Higher Marketing and Advertising Expenses
Marketing and advertising expenses were higher for the quarter, impacting operating income despite revenue growth.
Company Guidance
During the first quarter of 2025, Perdoceo Education Corporation reported strong financial performance and positive enrollment trends. The company achieved a net income of $43.7 million, or $0.65 per diluted share, with adjusted earnings per share at $0.70. Revenue increased by 26.6% to $213 million, bolstered by the St. Augustine acquisition, which contributed $39.2 million. CTU saw a 10.6% rise in total enrollments, although AIUS experienced a 4.5% decline. Nonetheless, AIUS is expected to grow in the second quarter. The company returned $34.4 million to shareholders through dividends and stock repurchases and anticipates continued revenue and enrollment growth for 2025, driven by high student retention and engagement levels. Adjusted operating income is projected to range between $220 million and $235 million for the year.

Perdoceo Education Financial Statement Overview

Summary
Perdoceo Education shows strong financial health with consistent revenue and profit growth, efficient cost management, and robust cash flow generation. The balance sheet is solid, with low leverage and strong equity ratios, providing financial stability. While liquidity management could be improved, the company's financial trajectory appears positive.
Income Statement
85
Very Positive
Perdoceo Education has demonstrated strong revenue and profit growth over the years, with a notable increase in revenue from $681 million to $726 million in the TTM period. The gross profit margin remains robust at 87.5%, while the net profit margin improved to 20.9% in the TTM period. EBIT and EBITDA margins are also healthy, indicating efficient cost management and profitability. Such positive trends indicate a strong financial performance in the education sector, which often faces fluctuating demand.
Balance Sheet
78
Positive
The company's balance sheet is solid with a low debt-to-equity ratio of 0.07, reflecting minimal leverage and financial risk. Return on equity is impressive at 15.6%, showcasing effective utilization of shareholder funds. The equity ratio is strong at 76.5%, indicating a solid financial foundation with a high proportion of assets financed by equity. These factors contribute to the company's financial stability, although there is room for improving liquidity management.
Cash Flow
80
Positive
Perdoceo Education's cash flow demonstrates stability and growth, evidenced by a 6.4% increase in free cash flow in the TTM period. The operating cash flow to net income ratio is 1.13, indicating that operating cash flows are sufficient to cover net income. Furthermore, the free cash flow to net income ratio is 1.10, which highlights the company's ability to generate cash beyond net earnings. Such metrics indicate strong cash generation and healthy financial flexibility.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue726.00M681.26M710.00M695.21M693.03M687.31M
Gross Profit586.46M560.40M579.68M578.49M584.29M575.55M
EBITDA220.84M215.47M209.41M152.37M165.78M158.33M
Net Income151.84M147.59M147.65M95.87M109.64M124.26M
Balance Sheet
Total Assets1.27B1.24B1.01B957.37M847.43M721.52M
Cash, Cash Equivalents and Short-Term Investments590.58M568.92M603.14M508.72M494.19M406.36M
Total Debt127.64M131.54M27.05M33.84M44.95M53.19M
Total Liabilities298.29M277.50M165.90M231.52M197.32M165.61M
Stockholders Equity970.25M959.54M841.42M725.85M650.11M555.91M
Cash Flow
Free Cash Flow167.06M156.97M105.61M135.57M180.66M170.19M
Operating Cash Flow172.23M161.59M112.03M148.19M191.12M179.96M
Investing Cash Flow-75.80M-107.78M-88.51M-326.75M54.32M-165.91M
Financing Cash Flow-69.61M-41.08M-23.38M-27.73M-29.95M-13.05M

Perdoceo Education Technical Analysis

Technical Analysis Sentiment
Positive
Last Price32.02
Price Trends
50DMA
30.93
Positive
100DMA
28.29
Positive
200DMA
26.53
Positive
Market Momentum
MACD
0.28
Positive
RSI
50.45
Neutral
STOCH
38.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRDO, the sentiment is Positive. The current price of 32.02 is below the 20-day moving average (MA) of 32.31, above the 50-day MA of 30.93, and above the 200-day MA of 26.53, indicating a neutral trend. The MACD of 0.28 indicates Positive momentum. The RSI at 50.45 is Neutral, neither overbought nor oversold. The STOCH value of 38.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRDO.

Perdoceo Education Risk Analysis

Perdoceo Education disclosed 30 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$4.42B20.4216.62%13.10%127.72%
UTUTI
78
Outperform
$1.76B31.1521.81%14.69%188.00%
77
Outperform
$2.10B14.1616.54%1.65%6.35%0.35%
69
Neutral
$2.02B17.876.86%2.85%5.72%11.02%
66
Neutral
$544.98M30.008.18%4.86%
64
Neutral
$726.00M59.367.04%15.24%-54.31%
62
Neutral
$16.85B11.50-7.38%2.96%1.59%-23.36%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRDO
Perdoceo Education
32.02
11.00
52.33%
APEI
American Public Education
30.21
12.57
71.26%
ATGE
Adtalem Global Education
123.05
54.85
80.43%
LINC
Lincoln Edu
22.98
10.89
90.07%
STRA
Strategic Education
83.45
-22.76
-21.43%
UTI
Universal Technical Institute
32.30
15.67
94.23%

Perdoceo Education Corporate Events

Executive/Board ChangesShareholder Meetings
Perdoceo Education Holds Annual Stockholders Meeting
Neutral
May 29, 2025

On May 22, 2025, Perdoceo Education held its annual meeting of stockholders where several key decisions were made. The stockholders elected eight directors to the Board, approved executive compensation on a nonbinding advisory basis, and ratified Grant Thornton LLP as the independent auditor for the fiscal year ending December 31, 2025.

The most recent analyst rating on (PRDO) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Perdoceo Education stock, see the PRDO 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.Date of analysis: May 03, 2025