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Here's Why You Should Retain Adtalem Stock in Your Portfolio
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Adtalem Global Education Inc. (ATGE - Free Report) stock’s performance has been impressive in the year-to-date (YTD) period, with a 42.6% rise compared with the Zacks Schools industry’s 8.7% growth. It has also outperformed the Zacks Consumer-Discretionary sector's rise of 3% and the S&P 500 index’s 1.1% decline during the same period.
This healthcare education provider and workforce solutions innovator is benefiting from solid enrollment growth, strategic initiatives and the efficient execution of its Growth with Purpose strategy. Also, the company’s focus on collaborations, innovation, marketing investments and long-term growth strategies is encouraging to its prospects. However, margin pressure in the Medical and Veterinary segment and increased expenses are concerns.
The Zacks Consensus Estimate for the company’s fiscal 2025 earnings per share has trended upward to $6.42 from $6.20 in the past 60 days. The estimated figure indicates growth of 28.1% from the prior-year reported figure. The growth prospect is further solidified by a VGM Score of A, backed by a Growth score of A, Value and Momentum Scores of B. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and prospects of an outperformance in the near term.
ATGE's YTD Price Performance
Image Source: Zacks Investment Research
What Is Contributing to the Growth Trajectory?
Focus on Innovation and Collaboration: The company continues to strengthen its presence in healthcare education through strategic collaborations and innovative programs. A balanced investment approach and growing partnerships are expected to support student success and meet evolving industry needs.
The company partnered with Hippocratic AI, Inc. to develop a curriculum for training clinicians in Artificial Intelligence healthcare applications. Furthermore, ATGE reported positive developments in the Medical and Veterinary segment, highlighting the strong value of Ross Med and AUC, with initiatives like the clinical Return Home program differentiating its offerings in the market. For the fourth consecutive year, AUC and Ross Vet recorded a first-time residency rate above 95%, placing more than 615 students in over 325 healthcare facilities. More than 40% of these placements are in medically underserved areas, helping to address the projected U.S. physician shortage of 187,000 by 2037.
In the third quarter of fiscal 2025, total student enrollment rose 9.8% year over year to 94,223 students, marking the 12th consecutive quarter of growth. Adtalem’s enhanced learning platform and innovative curriculum have positively impacted the student experience, further establishing its leadership in healthcare education.
Growth With Purpose Strategy: The company remains focused on its Growth With Purpose strategy, which emphasizes sustainable progress and strategic execution. This approach is expected to support ongoing improvements in performance and long-term value creation. Owing to a strong momentum in the first nine months of fiscal 2025, the company expects its Growth with Purpose strategy to drive further increases in revenues and profitability. As a result, the company has raised its fiscal 2025 guidance for revenues and adjusted earnings per share.
For fiscal 2025, Adtalem now expects revenues within $1,760-$1,775 million, up from $1,730-$1,760 million expected earlier. Adjusted EPS is projected to be in the range of $6.40-$6.60, up from the prior estimated range of $6.10-$6.30 per share.
Rising Healthcare Demand: Adtalem continues to strengthen its position in healthcare education through consistent growth in institutions and strategic investments. The company aims to address the nationwide shortage of healthcare professionals by aligning its programs with evolving workforce demands. In the first nine months of fiscal 2025, Adtalem saw strong growth trends across Chamberlain and Walden universities. The uptick was driven by pre-licensure and post-licensure nursing program growth, accompanied by robust demand for healthcare programs, driven by social and behavioral health and nursing, and non-healthcare programs.
Furthermore, the company's Practice Ready Specialty Focused program is reshaping nursing education through early exposure to leading specialties. Since its inception, over 4,000 students have enrolled, with 900 completing specialty rotations at more than 70 sites. The program was developed in collaboration with leading healthcare providers. The company plans to invest further to address growing demand in healthcare education, focusing on long-term value and returns for stakeholders.
What May Impact ATGE Stock
A few things could potentially strain the stock's performance. Rising operating costs are one of the major concerns. In the first nine months of fiscal 2025, the cost of educational services increased 10.9% year over year to $572.5 million. This uptick was mainly due to a rise in labor and other costs to support improved enrollment and an increase in the provision for bad debts. In the same period, student services and administrative expenses increased 2.7% year over year to $491.1 million. The surge in spending was due to a rise in incentive compensation expenses, marketing expenses and investments to support growth initiatives.
ATGE’s Zacks Rank and Key Picks
Adtalem currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer Discretionary sector are Stride, Inc. (LRN - Free Report) , Roblox Corporation (RBLX - Free Report) and Universal Technical Institute, Inc. (UTI - Free Report) .
Stride delivered a trailing four-quarter negative earnings surprise of 94.7%, on average. The stock has increased 118.4% in the past year. The Zacks Consensus Estimate for Stride‘s fiscal 2025 sales and earnings per share (EPS) indicates growth of 16.7% and 51.2%, respectively, from year-ago levels.
Roblox carries a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 16.6%, on average. The stock has gained 157.9% in the past year.
The Zacks Consensus Estimate for Roblox’s 2025 sales and EPS indicates growth of 22.5% and 2.1%, respectively, from the year-ago levels.
Universal Technical carries a Zacks Rank #2 at present. The company delivered a trailing four-quarter earnings surprise of 59.8%, on average. The stock has gained 137.9% in the past year.
The Zacks Consensus Estimate for Universal Technical’s fiscal 2025 sales and EPS indicates growth of 13.3% and 41.3%, respectively, from the year-ago levels.
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Here's Why You Should Retain Adtalem Stock in Your Portfolio
Adtalem Global Education Inc. (ATGE - Free Report) stock’s performance has been impressive in the year-to-date (YTD) period, with a 42.6% rise compared with the Zacks Schools industry’s 8.7% growth. It has also outperformed the Zacks Consumer-Discretionary sector's rise of 3% and the S&P 500 index’s 1.1% decline during the same period.
This healthcare education provider and workforce solutions innovator is benefiting from solid enrollment growth, strategic initiatives and the efficient execution of its Growth with Purpose strategy. Also, the company’s focus on collaborations, innovation, marketing investments and long-term growth strategies is encouraging to its prospects. However, margin pressure in the Medical and Veterinary segment and increased expenses are concerns.
The Zacks Consensus Estimate for the company’s fiscal 2025 earnings per share has trended upward to $6.42 from $6.20 in the past 60 days. The estimated figure indicates growth of 28.1% from the prior-year reported figure. The growth prospect is further solidified by a VGM Score of A, backed by a Growth score of A, Value and Momentum Scores of B. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and prospects of an outperformance in the near term.
ATGE's YTD Price Performance
Image Source: Zacks Investment Research
What Is Contributing to the Growth Trajectory?
Focus on Innovation and Collaboration: The company continues to strengthen its presence in healthcare education through strategic collaborations and innovative programs. A balanced investment approach and growing partnerships are expected to support student success and meet evolving industry needs.
The company partnered with Hippocratic AI, Inc. to develop a curriculum for training clinicians in Artificial Intelligence healthcare applications. Furthermore, ATGE reported positive developments in the Medical and Veterinary segment, highlighting the strong value of Ross Med and AUC, with initiatives like the clinical Return Home program differentiating its offerings in the market. For the fourth consecutive year, AUC and Ross Vet recorded a first-time residency rate above 95%, placing more than 615 students in over 325 healthcare facilities. More than 40% of these placements are in medically underserved areas, helping to address the projected U.S. physician shortage of 187,000 by 2037.
In the third quarter of fiscal 2025, total student enrollment rose 9.8% year over year to 94,223 students, marking the 12th consecutive quarter of growth. Adtalem’s enhanced learning platform and innovative curriculum have positively impacted the student experience, further establishing its leadership in healthcare education.
Growth With Purpose Strategy: The company remains focused on its Growth With Purpose strategy, which emphasizes sustainable progress and strategic execution. This approach is expected to support ongoing improvements in performance and long-term value creation. Owing to a strong momentum in the first nine months of fiscal 2025, the company expects its Growth with Purpose strategy to drive further increases in revenues and profitability. As a result, the company has raised its fiscal 2025 guidance for revenues and adjusted earnings per share.
For fiscal 2025, Adtalem now expects revenues within $1,760-$1,775 million, up from $1,730-$1,760 million expected earlier. Adjusted EPS is projected to be in the range of $6.40-$6.60, up from the prior estimated range of $6.10-$6.30 per share.
Rising Healthcare Demand: Adtalem continues to strengthen its position in healthcare education through consistent growth in institutions and strategic investments. The company aims to address the nationwide shortage of healthcare professionals by aligning its programs with evolving workforce demands. In the first nine months of fiscal 2025, Adtalem saw strong growth trends across Chamberlain and Walden universities. The uptick was driven by pre-licensure and post-licensure nursing program growth, accompanied by robust demand for healthcare programs, driven by social and behavioral health and nursing, and non-healthcare programs.
Furthermore, the company's Practice Ready Specialty Focused program is reshaping nursing education through early exposure to leading specialties. Since its inception, over 4,000 students have enrolled, with 900 completing specialty rotations at more than 70 sites. The program was developed in collaboration with leading healthcare providers. The company plans to invest further to address growing demand in healthcare education, focusing on long-term value and returns for stakeholders.
What May Impact ATGE Stock
A few things could potentially strain the stock's performance. Rising operating costs are one of the major concerns. In the first nine months of fiscal 2025, the cost of educational services increased 10.9% year over year to $572.5 million. This uptick was mainly due to a rise in labor and other costs to support improved enrollment and an increase in the provision for bad debts. In the same period, student services and administrative expenses increased 2.7% year over year to $491.1 million. The surge in spending was due to a rise in incentive compensation expenses, marketing expenses and investments to support growth initiatives.
ATGE’s Zacks Rank and Key Picks
Adtalem currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer Discretionary sector are Stride, Inc. (LRN - Free Report) , Roblox Corporation (RBLX - Free Report) and Universal Technical Institute, Inc. (UTI - Free Report) .
Stride currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stride delivered a trailing four-quarter negative earnings surprise of 94.7%, on average. The stock has increased 118.4% in the past year. The Zacks Consensus Estimate for Stride‘s fiscal 2025 sales and earnings per share (EPS) indicates growth of 16.7% and 51.2%, respectively, from year-ago levels.
Roblox carries a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 16.6%, on average. The stock has gained 157.9% in the past year.
The Zacks Consensus Estimate for Roblox’s 2025 sales and EPS indicates growth of 22.5% and 2.1%, respectively, from the year-ago levels.
Universal Technical carries a Zacks Rank #2 at present. The company delivered a trailing four-quarter earnings surprise of 59.8%, on average. The stock has gained 137.9% in the past year.
The Zacks Consensus Estimate for Universal Technical’s fiscal 2025 sales and EPS indicates growth of 13.3% and 41.3%, respectively, from the year-ago levels.