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Adtalem Global Education Inc. (ATGE) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Adtalem Global Education (ATGE - Free Report) ? Shares have been on the move with the stock up 24.4% over the past month. The stock hit a new 52-week high of $56.42 in the previous session. Adtalem Global Education has gained 58.3% since the start of the year compared to the 8.7% move for the Zacks Consumer Discretionary sector and the 31.4% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2023, Adtalem reported EPS of $0.93 versus consensus estimate of $0.82 while it beat the consensus revenue estimate by 1.77%.
For the current fiscal year, Adtalem is expected to post earnings of $4.34 per share on $1.5 billion in revenues. This represents a 3.09% change in EPS on a 3.42% change in revenues. For the next fiscal year, the company is expected to earn $4.90 per share on $1.57 billion in revenues. This represents a year-over-year change of 12.9% and 4.63%, respectively.
Valuation Metrics
Adtalem may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Adtalem has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.2X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 10.4X. Additionally, the stock has a PEG ratio of 0.86. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Adtalem currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Adtalem fits the bill. Thus, it seems as though Adtalem shares could have a bit more room to run in the near term.
How Does ATGE Stack Up to the Competition?
Shares of ATGE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Strategic Education Inc. (STRA - Free Report) . STRA has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Strategic Education Inc. beat our consensus estimate by 12.79%, and for the current fiscal year, STRA is expected to post earnings of $4.30 per share on revenue of $1.12 billion.
Shares of Strategic Education Inc. have gained 9.1% over the past month, and currently trade at a forward P/E of 27.15X and a P/CF of 17.82X.
The Schools industry is in the top 4% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ATGE and STRA, even beyond their own solid fundamental situation.
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Adtalem Global Education Inc. (ATGE) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Adtalem Global Education (ATGE - Free Report) ? Shares have been on the move with the stock up 24.4% over the past month. The stock hit a new 52-week high of $56.42 in the previous session. Adtalem Global Education has gained 58.3% since the start of the year compared to the 8.7% move for the Zacks Consumer Discretionary sector and the 31.4% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2023, Adtalem reported EPS of $0.93 versus consensus estimate of $0.82 while it beat the consensus revenue estimate by 1.77%.
For the current fiscal year, Adtalem is expected to post earnings of $4.34 per share on $1.5 billion in revenues. This represents a 3.09% change in EPS on a 3.42% change in revenues. For the next fiscal year, the company is expected to earn $4.90 per share on $1.57 billion in revenues. This represents a year-over-year change of 12.9% and 4.63%, respectively.
Valuation Metrics
Adtalem may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Adtalem has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.2X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 10.4X. Additionally, the stock has a PEG ratio of 0.86. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Adtalem currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Adtalem fits the bill. Thus, it seems as though Adtalem shares could have a bit more room to run in the near term.
How Does ATGE Stack Up to the Competition?
Shares of ATGE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Strategic Education Inc. (STRA - Free Report) . STRA has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Strategic Education Inc. beat our consensus estimate by 12.79%, and for the current fiscal year, STRA is expected to post earnings of $4.30 per share on revenue of $1.12 billion.
Shares of Strategic Education Inc. have gained 9.1% over the past month, and currently trade at a forward P/E of 27.15X and a P/CF of 17.82X.
The Schools industry is in the top 4% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ATGE and STRA, even beyond their own solid fundamental situation.