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Adtalem (ATGE) Down 2.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Adtalem Global Education (ATGE - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Adtalem due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Adtalem Global Education Inc. reported stellar results for second-quarter fiscal 2021, wherein the company’s earnings and revenues not only topped analysts’ expectations but also grew from the year-ago level.
For the quarter under review, adjusted earnings came in at 77 cents per share, which handily beat the consensus mark of 68 cents by 13.2%. The metric also increased 35.1% on a year-over-year basis.
Revenues & Operating Discussion
Quarterly revenues of $283.1 million beat the consensus mark by 1.8% and increased 6.4% year over year owing to enrolment growth at Chamberlain, as well as strong financial performance across Medical and Healthcare segment. For the fiscal second quarter, enrollment of new and total students grew 7.5% and 9.3% year over year, respectively.
Adjusted operating income from continuing operations of $52.6 million increased 24.4% year over year. The upside can be primarily attributed to cost efficiencies and increased revenues across the organization.
Segment Details
Medical and Healthcare: During the fiscal second quarter, revenues in the segment grew 6.5% year over year to $234.4 million.
In Chamberlain, revenues grew 13.2% year over year. New and total student enrollment for the November session increased 8.1% and 10.2% year over year, respectively.
Medical and Veterinary schools’ revenues decreased 2.4% year over year owing to COVID-19-led reduced clinical weeks at the medical schools and the loss of student transportation revenues. However, this was partially offset by a rise in student enrollment.
Adjusted operating income in the segment was $51.3 million, up 23.3% from the prior-year level on strong enrollment trends at Chamberlain, lower bad debt expenses and other operational improvements.
Financial Services: Revenues in the segment totaled $48.7 million, up 5.9% year over year, given higher revenues at OnCourse Learning and Becker. Revenues at Becker increased year over year due to growth in both CPA and CPE education program offerings. Adjusted operating income increased 37.2% from the prior-year quarter to $7.8 million.
Liquidity & Cash Flow
As of Dec 31, 2020, Adtalem had cash and cash equivalents of $449.3 million compared with $500.5 million at fiscal 2020-end. For the six months ended Dec 31, cash provided by operating activities totaled $63.4 million against $13.7 million reported in the year-ago period.
2021 Guidance
For fiscal 2021, Adtalem expects revenue growth of 5-7% and earnings per share from continuing operations (excluding special items) within 25-30%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.03% due to these changes.
VGM Scores
At this time, Adtalem has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Adtalem has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Adtalem (ATGE) Down 2.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Adtalem Global Education (ATGE - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Adtalem due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Adtalem (ATGE - Free Report) Q2 Earnings & Revenue Beat Estimates
Adtalem Global Education Inc. reported stellar results for second-quarter fiscal 2021, wherein the company’s earnings and revenues not only topped analysts’ expectations but also grew from the year-ago level.
For the quarter under review, adjusted earnings came in at 77 cents per share, which handily beat the consensus mark of 68 cents by 13.2%. The metric also increased 35.1% on a year-over-year basis.
Revenues & Operating Discussion
Quarterly revenues of $283.1 million beat the consensus mark by 1.8% and increased 6.4% year over year owing to enrolment growth at Chamberlain, as well as strong financial performance across Medical and Healthcare segment. For the fiscal second quarter, enrollment of new and total students grew 7.5% and 9.3% year over year, respectively.
Adjusted operating income from continuing operations of $52.6 million increased 24.4% year over year. The upside can be primarily attributed to cost efficiencies and increased revenues across the organization.
Segment Details
Medical and Healthcare: During the fiscal second quarter, revenues in the segment grew 6.5% year over year to $234.4 million.
In Chamberlain, revenues grew 13.2% year over year. New and total student enrollment for the November session increased 8.1% and 10.2% year over year, respectively.
Medical and Veterinary schools’ revenues decreased 2.4% year over year owing to COVID-19-led reduced clinical weeks at the medical schools and the loss of student transportation revenues. However, this was partially offset by a rise in student enrollment.
Adjusted operating income in the segment was $51.3 million, up 23.3% from the prior-year level on strong enrollment trends at Chamberlain, lower bad debt expenses and other operational improvements.
Financial Services: Revenues in the segment totaled $48.7 million, up 5.9% year over year, given higher revenues at OnCourse Learning and Becker. Revenues at Becker increased year over year due to growth in both CPA and CPE education program offerings. Adjusted operating income increased 37.2% from the prior-year quarter to $7.8 million.
Liquidity & Cash Flow
As of Dec 31, 2020, Adtalem had cash and cash equivalents of $449.3 million compared with $500.5 million at fiscal 2020-end. For the six months ended Dec 31, cash provided by operating activities totaled $63.4 million against $13.7 million reported in the year-ago period.
2021 Guidance
For fiscal 2021, Adtalem expects revenue growth of 5-7% and earnings per share from continuing operations (excluding special items) within 25-30%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.03% due to these changes.
VGM Scores
At this time, Adtalem has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Adtalem has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.