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Phoenix Education Partners, Inc. (PXED)
NYSE:PXED
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Phoenix Education Partners, Inc.
(NYSE:PXED)
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Rating:75Outperform
Price Target:
$38.00
▲(19.84% Upside)
The score is driven primarily by strong financial performance (growth, profitability, and cash generation) and a low P/E valuation, supported by a constructive earnings call with reiterated guidance and strong liquidity. The main constraints are mixed technical momentum and operational risks highlighted on the call (GAAP volatility from one-time items and cyber/fraud/regulatory overhangs).
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business strategies, positioning the company for sustained expansion.
Cash Generation
Robust cash generation enhances financial flexibility, allowing for strategic investments and resilience against economic fluctuations.
Credit Facility
The new credit facility strengthens liquidity and operational flexibility, supporting long-term growth and strategic initiatives.
Negative Factors
Cybersecurity Incident
Cybersecurity breaches can undermine trust and lead to regulatory scrutiny, potentially impacting long-term operational stability.
Enrollment Challenges
Enrollment challenges can hinder revenue growth and disrupt educational program stability, affecting long-term business prospects.
Reduced Cash Position
A reduced cash position limits financial flexibility, potentially constraining investment capacity and operational resilience.
Phoenix Education Partners, Inc. (PXED) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.20B
Dividend YieldN/A
Average Volume (3M)626.04K
Price to Earnings (P/E)11.0
Beta (1Y)1.92
Revenue Growth6.02%
EPS Growth18.32%
CountryUS
EmployeesN/A
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)1.38
Shares Outstanding35,755,930
10 Day Avg. Volume626,044
30 Day Avg. Volume626,044
Financial Highlights & Ratios
PEG Ratio0.56
Price to Book (P/B)5.51
Price to Sales (P/S)1.35
P/FCF Ratio20.95
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue2.03
Enterprise Value/Gross Profit6.72
Enterprise Value/Ebitda10.37
Forecast
1Y Price Target
$44.33Price Target Upside39.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Phoenix Education Partners, Inc. Business Overview & Revenue Model
Company DescriptionOwner/operator of the University of Phoenix, a post-secondary online education provider targeting working adults.
How the Company Makes MoneyPhoenix Education Partners, Inc. generates revenue through multiple streams, primarily by offering subscription-based access to its online learning platforms and digital resources. Schools and educational institutions pay for licenses to use PXED's curriculum and educational tools, which are designed to enhance student engagement and improve learning outcomes. Additionally, the company earns revenue from consulting services, where it partners with educational institutions to implement effective teaching strategies and integrate technology into their curricula. Significant partnerships with school districts and educational organizations further bolster its revenue potential, providing PXED with a steady influx of clients and contracts. The company may also explore grants and funding from educational initiatives aimed at promoting innovative teaching methods.
Phoenix Education Partners, Inc. Earnings Call Summary
Earnings Call Date:Jan 13, 2026
(Q1-2026)
| Next Earnings Date:Nov 19, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and financial trajectory: revenue and enrollment grew, adjusted EBITDA and margins expanded, adjusted net income rose, liquidity is strong, and management initiated a regular dividend while reiterating full-year guidance. Key strategic initiatives—AI integration, employer partnerships, and tightened fraud controls—are progressing. Offsetting these positives were significant one-time/noncash charges (notably $29.5M of share-based compensation), a $4.5M cyber incident expense, higher GAAP net income volatility, and ongoing market fraud activity that requires continued vigilance. Regulatory developments were preliminarily favorable but remain subject to final rules. On balance, the favorable trends, recurring operational improvements, and conservative guidance positioning outweigh the transitory and manageable negatives.Q1-2026 Updates
Positive Updates
Revenue Growth
Net revenue increased 2.9% year-over-year to $262.0 million in Q1 FY2026, consistent with management expectations and supporting the reiterated full-year guidance of $1.025B–$1.035B.
Enrollment Expansion
Average total degree enrollment rose 4.1% year-over-year to 85,600 students, with employer-affiliated enrollment growing to ~34% of total (up from ~31% in Q1 2025, a 3 percentage-point increase).
Adjusted EBITDA and Margin Improvement
Adjusted EBITDA increased 7.2% year-over-year to $75.2 million; adjusted EBITDA margin expanded to 28.7% from 27.5% in the prior-year period (an increase of 1.2 percentage points).
Adjusted Net Income and EPS Growth
Adjusted net income attributable to the company increased 5.3% to $53.6 million (from $50.9M prior year). Adjusted diluted EPS rose by $0.03 to $1.38 for the quarter.
Strong Liquidity and Capital Allocation
Cash, restricted cash and marketable securities totaled $218.1 million as of Nov 30, 2025, up from $194.8 million as of Aug 31, 2025 (+$23.3M). Operating cash generation was $31.1 million, with no outstanding debt or borrowings on the revolving credit facility.
Shareholder Return Initiation
Board declared inaugural regular quarterly cash dividend of approximately $0.21 per share (implying ~$0.84 annually), signaling confidence in cash generation and discipline in capital allocation.
Regulatory Outcome Favorable in Preliminary Data
Negotiated rulemaking produced an accountability framework consistent with expectations. Preliminary program performance metrics released by the Department of Education show that all University of Phoenix programs for which metrics were provided are passing; earnings data covered a majority (>50%) of their programs.
Progress on AI and Operational Initiatives
University is embedding AI into curriculum to build student fluency and deploying AI pilots for operational efficiency (LLM-based chat assistance, AI appointment setting/outreach) aimed at improving enrollment conversion, retention and 24/7 student servicing.
B2B Growth and Broad-Based Demand
Employer-affiliated (B2B) enrollment increased and contributed meaningfully to enrollment growth. Management reports broad-based program demand with >90% program alignment to market needs and active account management driving deeper employer penetration.
Negative Updates
GAAP Net Income Decline
Net income attributable to the company declined to $15.5 million (diluted EPS $0.40) from $46.4 million (diluted EPS $1.23) in the prior year, primarily driven by large noncash share-based compensation and other IPO-related expenses.
Large Noncash Share-Based Compensation
The quarter included $29.5 million of noncash share-based compensation excluded from Adjusted EBITDA; approximately $23 million of that related to modification of pre-IPO stock options. Management expects this to be non-recurring but it materially depressed GAAP earnings in the quarter.
Cybersecurity Incident Costs
A zero-day vulnerability in Oracle E-Business Suite resulted in a disclosed cyber incident and $4.5 million of expenses recorded in the quarter (notification, third-party cybersecurity, legal). Management expects some additional related expenses in future periods but notes comprehensive cyber insurance coverage.
Expense Increases (Instructional and G&A)
Instructional expenses increased by $7.1 million to $115.2 million and general & administrative expenses rose $24.6 million to $106.6 million year-over-year, with much of the increase driven by the elevated stock-based compensation in the quarter.
Revenue vs Enrollment Compositional Headwinds
Revenue growth (2.9%) lagged enrollment growth (4.1%) in Q1 in part due to expansion of B2B students who typically receive higher discounts, and due to compositional effects from last year's higher short-duration 'risk-free' enrollments—management expects a lag between enrollment and revenue in Q2–Q3 before normalizing in Q4.
Ongoing Market Fraud Activity
While the company has moved detection/verification to the top of the funnel and reports meaningful deterrence and improved enrollment rep productivity since Q4 FY2025, management acknowledged that fraudulent activity remains present in the broader market and must be actively managed.
Regulatory Uncertainty Remains Until Final Rules
Although preliminary program metrics were favorable and management does not anticipate material adverse effects, negotiated rulemaking outcomes remain preliminary until finalized; certain program types (e.g., behavioral sciences) could be structurally more exposed under earnings metrics.
Company Guidance
Phoenix Education Partners reiterated its fiscal 2026 guidance — net revenue $1.025–$1.035 billion and adjusted EBITDA $244–$249 million — after a Q1 start that it called “solid,” with net revenue up 2.9% YoY to $262.0 million, average total degree enrollment up 4.1% YoY to 85,600 (employer‑affiliated students ≈34% of total, up from ≈31%), adjusted EBITDA up 7.2% to $75.2 million (margin 28.7% vs. 27.5%), adjusted net income up 5.3% to $53.6 million and adjusted diluted EPS $1.38 (up $0.03), GAAP net income $15.5 million or $0.40 diluted EPS (vs. $46.4M/$1.23 prior), Q1 add‑backs of $29.5 million noncash share‑based compensation (≈$23M related to pre‑IPO option modifications) and $4.5 million cyber‑incident expense, a strong liquidity position with $218.1 million in cash and marketable securities (vs. $194.8M), $31.1M cash from operations, $4.7M capex, no outstanding debt or revolver borrowings, and the declaration of an inaugural quarterly dividend of ≈$0.21 per share (~$0.84 annualized) payable Feb 18, 2026.Phoenix Education Partners, Inc. Financial Statement Overview
Summary
Strong overall fundamentals supported by very strong revenue growth and solid profitability (56.71% gross margin; 13.29% net margin) plus robust free cash flow growth. Balance sheet leverage appears prudent (debt-to-equity 0.30), though declining stockholders’ equity and lower operating cash flow vs. prior year are key watch items.Income Statement
Phoenix Education Partners, Inc. has demonstrated strong revenue growth with a remarkable 296.77% increase in the latest year, indicating robust expansion. The company maintains healthy profitability with a gross profit margin of 56.71% and a net profit margin of 13.29%, reflecting efficient cost management. EBIT and EBITDA margins are also solid at 18.13% and 20.31%, respectively, showcasing operational efficiency. However, the slight decline in gross profit margin from the previous year suggests potential cost pressures.Balance Sheet
The balance sheet of Phoenix Education Partners, Inc. is stable with a manageable debt-to-equity ratio of 0.30, indicating prudent leverage. The return on equity is impressive at 54.25%, highlighting strong profitability relative to shareholder investments. The equity ratio stands at 50.00%, suggesting a balanced capital structure. However, the decrease in stockholders' equity compared to the previous year could be a point of concern.Cash Flow
The company shows a significant improvement in free cash flow growth at 299.59%, indicating enhanced cash generation capabilities. The operating cash flow to net income ratio is 0.54, suggesting a reasonable conversion of earnings into cash. The free cash flow to net income ratio of 0.74 reflects a strong ability to generate cash relative to profits. Despite these strengths, the decline in operating cash flow from the previous year warrants attention.| Breakdown | Dec 2025 | Dec 2025 | Dec 2024 | Dec 2023 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 1.01B | 1.01B | 950.01M | 835.25M |
| Gross Profit | 571.20M | 571.20M | 546.09M | 455.99M |
| EBITDA | 204.60M | 204.60M | 189.26M | 113.31M |
| Net Income | 133.88M | 133.88M | 113.13M | 64.93M |
Balance Sheet | ||||
| Total Assets | 493.56M | 493.56M | 695.25M | 682.26M |
| Cash, Cash Equivalents and Short-Term Investments | 145.51M | 145.51M | 313.68M | 251.22M |
| Total Debt | 73.30M | 73.30M | 84.22M | 98.31M |
| Total Liabilities | 253.51M | 253.51M | 346.32M | 378.89M |
| Stockholders Equity | 246.77M | 246.77M | 327.30M | 283.85M |
Cash Flow | ||||
| Free Cash Flow | 64.93M | 64.93M | 140.65M | 89.97M |
| Operating Cash Flow | 87.39M | 87.39M | 163.24M | 105.68M |
| Investing Cash Flow | -20.00M | -20.00M | -27.50M | -16.93M |
| Financing Cash Flow | -250.56M | -250.56M | -75.19M | -6.52M |
Phoenix Education Partners, Inc. Risk Analysis
Phoenix Education Partners, Inc. disclosed 57 risk factors in its most recent earnings report. Phoenix Education Partners, Inc. 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
Phoenix Education Partners, Inc. Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.20B | 10.98 | ― | ― | 6.02% | 18.32% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
45 Neutral | $7.10M | -15.42 | -4.26% | ― | -14.35% | -744.00% | |
38 Underperform | $6.89M | -1.25 | -48.49% | ― | 44.99% | 61.58% | |
37 Underperform | $5.33M | -0.41 | ― | ― | ― | ― |
* Consumer Defensive Sector Average
PXED
Phoenix Education Partners, Inc.
31.71
-4.39
-12.16%
WAFU
Wah Fu Education Group
1.63
0.06
3.63%
LXEH
Lixiang Education Holding Co
0.20
-4.64
-95.97%
EEIQ
Elite Education Group International
0.29
-0.72
-71.19%
GV
Visionary Education Technology Holdings Group
1.50
-0.81
-35.11%
GSUN
Golden Sun Education Group Limited Class A
1.39
-1.41
-50.36%
Phoenix Education Partners, Inc. Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Phoenix Education Partners Faces Cybersecurity Incident
Negative
Dec 2, 2025
The University of Phoenix, a subsidiary of Phoenix Education Partners, Inc., experienced a cybersecurity incident involving the Oracle E-Business Suite software platform, where an unauthorized third-party accessed personal data by exploiting a software vulnerability. The incident, detected in November 2025, did not affect business operations or student programming, and the company has since installed patches to address the vulnerability. While the investigation is ongoing, the company believes the data breach occurred in August 2025 and has not resulted in public dissemination of the data. The company is notifying affected individuals and regulatory entities and expects to incur related expenses, but does not foresee a material adverse effect on its operations.
The most recent analyst rating on (PXED) stock is a Buy with a $33.00 price target. To see the full list of analyst forecasts on Phoenix Education Partners, Inc. stock, see the PXED Stock Forecast page.
Private Placements and Financing
Phoenix Education Partners Secures $100M Credit Facility
Positive
Nov 13, 2025
On November 13, 2025, Phoenix Education Partners, Inc. entered into a Revolving Credit Agreement with Morgan Stanley Senior Funding, Inc., establishing a $100 million senior secured revolving credit facility. This facility, maturing on November 13, 2030, is intended for general corporate purposes and is backed by the company’s assets and those of its subsidiaries. The agreement includes various covenants and requirements, such as maintaining a maximum net first lien leverage ratio and paying commitment and agency fees. This financial move is likely to enhance the company’s liquidity and operational flexibility.
The most recent analyst rating on (PXED) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Phoenix Education Partners, Inc. stock, see the PXED Stock Forecast page.
Private Placements and FinancingRegulatory Filings and Compliance
Phoenix Education Partners IPO Raises $156.4 Million
Neutral
Oct 15, 2025
On October 8, 2025, Phoenix Education Partners, Inc. entered into an underwriting agreement with Morgan Stanley and Goldman Sachs for its initial public offering, resulting in $136 million in gross proceeds from the sale of 4,250,000 shares, with an additional $20.4 million from an option exercised by underwriters. The company also established stockholders’ and registration rights agreements with major stakeholders Apollo and Vistria, granting them significant influence over board appointments and stock registration, which could impact the company’s governance and shareholder dynamics.
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.