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Solid Enrollment Growth Aids Adtalem's (ATGE) Performance
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Adtalem Global Education Inc. (ATGE - Free Report) is benefiting from solid enrollment growth and cost-saving initiatives. Also, its focus on long-term sustainability and growth and strategic partnerships bode well.
Shares of this Zacks Rank #1 (Strong Buy) company have increased 7.4% in the past month compared with the Zacks Schools industry’s 2% growth. Earnings estimates for 2024 have increased to $4.64 per share from $4.31 in the past 60 days. This positive trend signifies bullish analysts’ sentiments, indicating robust fundamentals and the expectation of outperformance in the near term.
This leading healthcare education provider has a long-term earnings growth rate of 15%, which highlights its inherent strength. The company’s 2024 earnings and sales are likely to witness growth of 10.2% and 6.4% year over year, respectively.
Image Source: Zacks Investment Research
Growth Driving Factors of the Stock
Solid Enrollment Growth: During second-quarter fiscal 2024, the company’s revenues increased 8.4% year over year to $393.2 million. The upside was driven by strong demand at Chamberlain University and Walden University.
During the quarter, total student enrollment at Chamberlain increased year over year by 6.6% to 35,592 students. The upside was backed by continued growth in pre-licensure and post-licensure nursing programs and higher persistence across the segment.
Total student enrollment at Walden increased 7.9% year over year to 40,971 students, driven by growth in healthcare and non-healthcare programs and high persistence.
Cost Control Efforts: In order to address increasing cost pressure, Adtalem undertook cost-saving initiatives like workforce reduction, centralized operations and curbing discretionary spending through supply management. The company believes that its portfolio management approach and effective cost management will help drive sustainability in revenues and earnings per share (EPS) growth over the long term.
During the fiscal second-quarter 2024 earnings call, the company stated that through active treasury management, it is generating savings that can be redeployed to expand its market-leading position. In the quarter, adjusted EPS of $1.23 increased 51.4% year over year due to lower restructuring and business integration expenses and growth in the top line.
Strategic Partnerships: Adtalem is prioritizing balanced investment initiatives to benefit shareholders. The company plans to partner with corporations, hospitals, government agencies, and professional organizations to design education programs to teach new skills to employees. Also, an increased number of short-term programs will be introduced that are more directly aimed at meeting students’ preferences and employers’ needs. It keeps on collaborating with different institutions to boost student enrollment.
During the second quarter of fiscal 2024, the company stated advancements in strategic partnerships with local health systems in several markets, including Los Angeles, Chicago, Miami, Detroit and New York, through the Ross University School of Medicine’s Clinical Return Home program.
Solid Long-term Growth Prospects: The company is steadfast in its focus on long-term sustainability and growth, continuously aligning its strategies with a forward-looking vision. On Jun 21, 2023, the company unveiled its long-term growth strategy and financial targets through fiscal 2026.
For the fiscal 2024, the company expects revenues of $1,520-$1,560 million, up from the prior expectation of $1,470-$1,530 million. Adjusted earnings are projected in the range of $4.55-$4.75 per share, up from the prior estimate of earnings of $4.25-$4.45. The growth rate of revenues and adjusted EPS for fiscal 2025 is anticipated to be in the range of 4-6% and 10-15%, respectively. The same for fiscal 2026 is projected to range in between 5-8% and 13-18%, respectively.
LRN has a trailing four-quarter earnings surprise of 45.2%, on average. The stock has gained 41.3% in the past six months. The Zacks Consensus Estimate for LRN’s fiscal 2024 sales and EPS indicates an increase of 10% and 45.1%, respectively, from the year-ago levels.
Ralph Lauren Corporation (RL - Free Report) presently sports a Zacks Rank of #1. RL has a trailing four-quarter earnings surprise of 18.7%, on average. The stock has surged 69.7% in the past six months.
The Zacks Consensus Estimate for RL’s fiscal 2025 sales and EPS suggests growth of 4.2% and 9.5%, respectively, from the year-ago levels.
Hyatt Hotels Corporation (H - Free Report) currently sports a Zacks Rank of #2 (Buy). Hyatt has a trailing four-quarter earnings surprise of 17.8%, on average. The stock has increased 53.8% in the past six months.
The Zacks Consensus Estimate for H’s 2024 sales and EPS calls for growth of 3.5% and 25%, respectively, from the year-ago levels.
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Solid Enrollment Growth Aids Adtalem's (ATGE) Performance
Adtalem Global Education Inc. (ATGE - Free Report) is benefiting from solid enrollment growth and cost-saving initiatives. Also, its focus on long-term sustainability and growth and strategic partnerships bode well.
Shares of this Zacks Rank #1 (Strong Buy) company have increased 7.4% in the past month compared with the Zacks Schools industry’s 2% growth. Earnings estimates for 2024 have increased to $4.64 per share from $4.31 in the past 60 days. This positive trend signifies bullish analysts’ sentiments, indicating robust fundamentals and the expectation of outperformance in the near term.
This leading healthcare education provider has a long-term earnings growth rate of 15%, which highlights its inherent strength. The company’s 2024 earnings and sales are likely to witness growth of 10.2% and 6.4% year over year, respectively.
Image Source: Zacks Investment Research
Growth Driving Factors of the Stock
Solid Enrollment Growth: During second-quarter fiscal 2024, the company’s revenues increased 8.4% year over year to $393.2 million. The upside was driven by strong demand at Chamberlain University and Walden University.
During the quarter, total student enrollment at Chamberlain increased year over year by 6.6% to 35,592 students. The upside was backed by continued growth in pre-licensure and post-licensure nursing programs and higher persistence across the segment.
Total student enrollment at Walden increased 7.9% year over year to 40,971 students, driven by growth in healthcare and non-healthcare programs and high persistence.
Cost Control Efforts: In order to address increasing cost pressure, Adtalem undertook cost-saving initiatives like workforce reduction, centralized operations and curbing discretionary spending through supply management. The company believes that its portfolio management approach and effective cost management will help drive sustainability in revenues and earnings per share (EPS) growth over the long term.
During the fiscal second-quarter 2024 earnings call, the company stated that through active treasury management, it is generating savings that can be redeployed to expand its market-leading position. In the quarter, adjusted EPS of $1.23 increased 51.4% year over year due to lower restructuring and business integration expenses and growth in the top line.
Strategic Partnerships: Adtalem is prioritizing balanced investment initiatives to benefit shareholders. The company plans to partner with corporations, hospitals, government agencies, and professional organizations to design education programs to teach new skills to employees. Also, an increased number of short-term programs will be introduced that are more directly aimed at meeting students’ preferences and employers’ needs. It keeps on collaborating with different institutions to boost student enrollment.
During the second quarter of fiscal 2024, the company stated advancements in strategic partnerships with local health systems in several markets, including Los Angeles, Chicago, Miami, Detroit and New York, through the Ross University School of Medicine’s Clinical Return Home program.
Solid Long-term Growth Prospects: The company is steadfast in its focus on long-term sustainability and growth, continuously aligning its strategies with a forward-looking vision. On Jun 21, 2023, the company unveiled its long-term growth strategy and financial targets through fiscal 2026.
For the fiscal 2024, the company expects revenues of $1,520-$1,560 million, up from the prior expectation of $1,470-$1,530 million. Adjusted earnings are projected in the range of $4.55-$4.75 per share, up from the prior estimate of earnings of $4.25-$4.45. The growth rate of revenues and adjusted EPS for fiscal 2025 is anticipated to be in the range of 4-6% and 10-15%, respectively. The same for fiscal 2026 is projected to range in between 5-8% and 13-18%, respectively.
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Stride, Inc. (LRN - Free Report) currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.
LRN has a trailing four-quarter earnings surprise of 45.2%, on average. The stock has gained 41.3% in the past six months. The Zacks Consensus Estimate for LRN’s fiscal 2024 sales and EPS indicates an increase of 10% and 45.1%, respectively, from the year-ago levels.
Ralph Lauren Corporation (RL - Free Report) presently sports a Zacks Rank of #1. RL has a trailing four-quarter earnings surprise of 18.7%, on average. The stock has surged 69.7% in the past six months.
The Zacks Consensus Estimate for RL’s fiscal 2025 sales and EPS suggests growth of 4.2% and 9.5%, respectively, from the year-ago levels.
Hyatt Hotels Corporation (H - Free Report) currently sports a Zacks Rank of #2 (Buy). Hyatt has a trailing four-quarter earnings surprise of 17.8%, on average. The stock has increased 53.8% in the past six months.
The Zacks Consensus Estimate for H’s 2024 sales and EPS calls for growth of 3.5% and 25%, respectively, from the year-ago levels.