Perdoceo Education (PRDO) AI Stock Analysis

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Perdoceo Education

(NASDAQ:PRDO)

82Outperform

Perdoceo Education's strong financial performance is a significant advantage, bolstered by stable revenues, high profitability, and effective cash flow management. The technical analysis and valuation indicators suggest the stock is reasonably priced with potential for growth. The positive earnings call and strategic board appointment further support optimistic future prospects, despite some challenges.

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.

Market Valuation

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

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

$1.65B

Dividend Yield1.99%

Average Volume (3M)641.97K

Price to Earnings (P/E)11.5

Beta (1Y)0.27

Revenue Growth-4.05%

EPS Growth1.50%

CountryUS

Employees5,690

SectorConsumer Cyclical

Sector Strength63

IndustryEducation & Training Services

Share Statistics

EPS (TTM)2.20

Shares Outstanding65,533,554

10 Day Avg. Volume492,724

30 Day Avg. Volume641,967

Financial Highlights & Ratios

PEG Ratio7.63

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.80

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit1.95

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$38.00

Price Target Upside50.97% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Perdoceo Education Business Overview & Revenue Model

Company DescriptionPerdoceo Education Corporation provides postsecondary education through online, campus-based, and blended learning programs in the United States. The company operates in two segments, Colorado Technical University and American InterContinental University. It offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity, and criminal justice, as well as business studies, information technologies, education, and health sciences. The company also operates intellipath, a personalized learning platform; and a mobile application and two-way messaging platform. As of December 31, 2021, it had a total student enrollment of approximately 40,400 students. The company was formerly known as Career Education Corporation and changed its name to Perdoceo Education Corporation in January 2020. Perdoceo Education Corporation was incorporated in 1994 and is based in Schaumburg, Illinois.

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 demonstrates strong financial health, with stable revenue growth, high profitability margins, and a solid balance sheet characterized by low debt and high return on equity. Robust cash flow generation further supports its financial stability, enabling growth opportunities.

Income Statement

Very Positive

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.

Balance Sheet

Very Positive

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.

Cash Flow

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Neutral

Last Price25.17

Price Trends

50DMA

25.32

Negative

100DMA

26.29

Negative

200DMA

24.60

Positive

Market Momentum

MACD

-0.15

Positive

RSI

48.29

Neutral

STOCH

47.52

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRDO, the sentiment is Neutral. The current price of 25.17 is below the 20-day moving average (MA) of 25.33, below the 50-day MA of 25.32, and above the 200-day MA of 24.60, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 48.29 is Neutral, neither overbought nor oversold. The STOCH value of 47.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRDO	82 Outperform	$1.65B	11.47	16.39%	1.99%	-4.05%	1.50%
ATGE	79 Outperform	$4.00B	19.99	14.63%	―	12.83%	97.16%
UTI	74 Outperform	$1.53B	28.84	21.41%	―	14.70%	275.89%
STRA	73 Outperform	$1.96B	17.41	6.86%	2.94%	5.72%	11.02%
APEI	68 Neutral	$423.13M	43.14	5.41%	―	4.00%	―
Sector *	61 Neutral	$6.55B	11.72	3.07%	4.01%	2.66%	-21.27%
LINC	57 Neutral	$533.92M	53.23	5.73%	―	16.40%	-62.64%

* Consumer Cyclical Sector Average

Performance Comparison

PRDO

Perdoceo Education

25.17

1.33

5.58%

APEI

American Public Education

23.46

8.38

55.57%

ATGE

Adtalem Global Education

107.24

47.16

78.50%

LINC

Lincoln Edu

17.25

6.16

55.55%

STRA

Strategic Education

81.29

-36.40

-30.93%

UTI

Universal Technical Institute

28.57

12.96

83.02%

Perdoceo Education Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 0.00%|

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.

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.