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

Acquisition

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.

Earnings

Perdoceo Education reported financial results that topped estimates and initial guidance was above expectations.

Valuation

Perdoceo’s shares trade at a significant discount to its peer group, with a raised price target of $38, indicating approximately 50% upside.

Negative Factors

Market Position

Perdoceo's shares trade at a significant discount to its postsecondary education peer group average, representing a potential upside.

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

Market Cap

$2.03B

Dividend Yield1.63%

Average Volume (3M)548.91K

Price to Earnings (P/E)13.7

Beta (1Y)0.36

Revenue Growth6.35%

EPS Growth0.35%

CountryUS

Employees5,690

SectorConsumer Cyclical

Sector Strength76

IndustryEducation & Training Services

Share Statistics

EPS (TTM)0.65

Shares Outstanding65,536,260

10 Day Avg. Volume535,577

30 Day Avg. Volume548,909

Financial Highlights & Ratios

PEG Ratio4.32

Price to Book (P/B)2.10

Price to Sales (P/S)0.00

P/FCF Ratio12.18

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue0.75

Enterprise Value/Gross Profit3.46

Enterprise Value/Ebitda2.59

Forecast

1Y Price Target

$38.00

Price Target Upside23.66% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Perdoceo Education Business Overview & Revenue Model

Company DescriptionPerdoceo Education Corporation (PRDO) is a provider of postsecondary education programs primarily in North America. The company operates through its accredited institutions, including the American InterContinental University and Colorado Technical University. These universities offer a wide range of degree programs, from associate to doctoral levels, across various fields such as business, information technology, healthcare, and criminal justice. Perdoceo Education focuses on delivering online and campus-based education services, catering to a diverse student population with flexible learning options.

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 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

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
726.00M	681.26M	710.00M	695.21M	693.03M	687.31M
	Gross Profit
586.46M	560.40M	579.68M	578.49M	584.29M	575.55M
	EBIT
179.70M	174.25M	150.45M	129.64M	149.02M	142.93M
	EBITDA
220.84M	215.47M	209.41M	152.37M	165.78M	158.33M
	Net Income Common Stockholders
151.84M	147.59M	147.65M	95.87M	109.64M	124.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
590.58M	568.92M	603.14M	508.72M	494.19M	406.36M
	Total Assets
1.27B	1.24B	1.01B	957.37M	847.43M	721.52M
	Total Debt
127.64M	131.54M	27.05M	33.84M	44.95M	53.19M
	Net Debt
-4.42M	22.41M	-90.96M	-75.57M	-275.03M	-52.49M
	Total Liabilities
298.29M	277.50M	165.90M	231.52M	197.32M	165.61M
	Stockholders Equity
970.25M	959.54M	841.42M	725.85M	650.11M	555.91M
Cash Flow		Free Cash Flow
167.06M	156.97M	105.61M	135.57M	180.66M	170.19M
	Operating Cash Flow
172.23M	161.59M	112.03M	148.19M	191.12M	179.96M
	Investing Cash Flow
-75.80M	-107.78M	-88.51M	-326.75M	54.32M	-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 Price30.73

Price Trends

50DMA

27.08

Positive

100DMA

26.95

Positive

200DMA

25.18

Positive

Market Momentum

MACD

1.29

Positive

RSI

67.74

Neutral

STOCH

36.23

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 30.73 is above the 20-day moving average (MA) of 29.77, above the 50-day MA of 27.08, and above the 200-day MA of 25.18, indicating a bullish trend. The MACD of 1.29 indicates Positive momentum. The RSI at 67.74 is Neutral, neither overbought nor oversold. The STOCH value of 36.23 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 3 New Risks

Our corporate engagement programs have contributed to student enrollment growth through 2024. If we fail to enter new corporate engagements or if existing corporate partners pause or reduce participation in their tuition assistance programs, total student enrollments may suffer. Q4, 2024

The U.S. political and economic environment could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory and policy changes by the new U.S. presidential administration may directly affect us and the global economy. Q4, 2024

Natural disasters or other extraordinary events may cause us to close some of our schools or suffer casualty losses. Q4, 2024

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
ATGE	80 Outperform	$4.62B	21.32	16.62%	―	13.10%	127.72%
UTI	79 Outperform	$1.87B	33.07	21.81%	―	14.69%	188.00%
PRDO	77 Outperform	$2.03B	13.72	16.54%	1.63%	6.35%	0.35%
STRA	73 Outperform	$2.12B	18.75	6.86%	2.74%	5.72%	11.02%
APEI	69 Neutral	$528.74M	29.10	8.18%	―	4.86%	―
Sector *	62 Neutral	$6.84B	11.22	2.83%	3.93%	2.65%	-21.93%
LINC	60 Neutral	$676.72M	55.33	7.04%	―	15.24%	-54.31%

* Consumer Cyclical Sector Average

Performance Comparison

PRDO

Perdoceo Education

31.03

8.17

35.74%

APEI

American Public Education

29.31

11.68

66.25%

ATGE

Adtalem Global Education

128.50

62.96

96.06%

LINC

Lincoln Edu

22.02

10.18

85.98%

STRA

Strategic Education

87.48

-24.31

-21.75%

UTI

Universal Technical Institute

34.99

19.64

127.95%

Perdoceo Education Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 22.09%|

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 Corporate Events

Executive/Board Changes

Perdoceo Education Approves 2025 Annual Incentive Plan

Neutral

Mar 12, 2025

On March 6, 2025, Perdoceo Education Corporation’s Compensation Committee approved the 2025 Annual Incentive Plan, which mirrors the 2024 plan in structure, focusing on adjusted operating income and individual goals for senior executives. Additionally, the committee approved salary and incentive adjustments for key executives, including a 6.25% salary increase for CEO Todd Nelson and a 20% increase in the Long-Term Incentive target for CFO Ashish Ghia.

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.