As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the education services industry, including Grand Canyon Education (NASDAQ: LOPE) and its peers.
A whole industry has emerged to address the problem of rising education costs, offering consumers alternatives to traditional education paths such as four-year colleges. These alternative paths, which may include online courses or flexible schedules, make education more accessible to those with work or child-rearing obligations. However, some have run into issues around the value of the degrees and certifications they provide and whether customers are getting a good deal. Those who don’t prove their value could struggle to retain students, or even worse, invite the heavy hand of regulation.
The 8 education services stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.
Luckily, education services stocks have performed well with share prices up 10.4% on average since the latest earnings results.
Slowest Q1: Grand Canyon Education (NASDAQ: LOPE)
Founded in 1949, Grand Canyon Education (NASDAQ: LOPE) is an educational services provider known for its operation at Grand Canyon University.
Grand Canyon Education reported revenues of $289.3 million, up 5.3% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a satisfactory quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations.
Interestingly, the stock is up 5.3% since reporting and currently trades at $195.20.
Is now the time to buy Grand Canyon Education? Access our full analysis of the earnings results here, it’s free.
Best Q1: Strategic Education (NASDAQ: STRA)
Formed through the merger of Strayer Education and Capella Education in 2018, Strategic Education (NASDAQ: STRA) is a career-focused higher education provider.
Strategic Education reported revenues of $303.6 million, up 4.6% year on year, outperforming analysts’ expectations by 1%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 9% since reporting. It currently trades at $87.47.
Is now the time to buy Strategic Education? Access our full analysis of the earnings results here, it’s free.
Bright Horizons (NYSE: BFAM)
Founded in 1986, Bright Horizons (NYSE: BFAM) is a global provider of child care, early education, and workforce support solutions.
Bright Horizons reported revenues of $665.5 million, up 6.9% year on year, in line with analysts’ expectations. Still, its results were good as it locked in a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
Bright Horizons delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 2.3% since the results and currently trades at $129.62.
Read our full analysis of Bright Horizons’s results here.
Lincoln Educational (NASDAQ: LINC)
Established in 1946, Lincoln Educational (NASDAQ: LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Lincoln Educational reported revenues of $117.5 million, up 13.7% year on year. This number surpassed analysts’ expectations by 2%. Overall, it was an exceptional quarter as it also put up an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 5.9% since reporting and currently trades at $22.14.
Read our full, actionable report on Lincoln Educational here, it’s free.
Universal Technical Institute (NYSE: UTI)
Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.
Universal Technical Institute reported revenues of $207.4 million, up 12.6% year on year. This result beat analysts’ expectations by 2.8%. It was an exceptional quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Universal Technical Institute achieved the highest full-year guidance raise among its peers. The stock is up 18.4% since reporting and currently trades at $35.08.
Read our full, actionable report on Universal Technical Institute here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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