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Adtalem Global Education Inc (ATGE)
NYSE:ATGE
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Adtalem Global Education
(NYSE:ATGE)78Outperform
Positive Factors
Enrollment Growth
Total student enrollment increased 11.6% to 91,264, marking the sixth consecutive year-over-year increase.
Financial Performance
Adtalem Global Education reported financial results of its fiscal second quarter that significantly topped expectations and full-year guidance was raised.
Negative Factors
Valuation Concerns
The stock trades at a premium to its peer group average, which is viewed as justified given Adtalem’s focus on nursing and healthcare.
Adtalem Global Education (ATGE) vs. S&P 500 (SPY)
Market Cap
$3.50B
Dividend YieldN/A
Average Volume (3M)455.37K
Price to Earnings (P/E)16.9
Beta (1Y)1.02
Revenue Growth12.83%
EPS Growth97.16%
CountryUS
Employees9,938
SectorConsumer Cyclical
Sector Strength53
IndustryEducation
Share Statistics
EPS (TTM)5.37
Shares Outstanding37,264,816
10 Day Avg. Volume467,146
30 Day Avg. Volume455,369
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)N/A
Price to Sales (P/S)2.07
Price to Cash Flow (P/CF)-46.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$119.67Price Target Upside31.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Adtalem Global Education Business Overview & Revenue Model
Company DescriptionAdtalem Global Education (ATGE) is a leading workforce solutions provider that operates a diverse portfolio of institutions and companies in the education sector. It focuses on empowering students and professionals to achieve their career goals through high-quality educational programs and services. Adtalem's core offerings include degree programs in healthcare, financial services, and professional education, delivered through its flagship institutions like Chamberlain University and Walden University.
How the Company Makes MoneyAdtalem Global Education generates revenue primarily through tuition fees and related educational services offered by its academic institutions. The company earns income by enrolling students in its various degree and certificate programs, with a significant focus on healthcare education. Additionally, Adtalem benefits from partnerships and collaborations with healthcare institutions, government agencies, and other organizations that support its mission to provide career-focused education. The company also explores opportunities in professional education and training, which contribute to its diverse revenue streams. Factors such as enrollment rates, tuition pricing, and the expansion or introduction of new programs significantly impact Adtalem's earnings.
Adtalem Global Education Financial Statement Overview
Summary
Adtalem Global Education demonstrates a robust financial performance, with strong profitability and efficient operations. The company benefits from a high gross profit margin and improving net profit margin, supported by notable revenue growth. Despite a slight concern over declining equity, the overall financial health is solid, with effective cash flow management and operational efficiency.Income Statement
Adtalem Global Education exhibits a strong financial performance with a solid gross profit margin and improving net profit margin. The TTM (Trailing-Twelve-Months) reveals a gross profit margin of 68.63% and a net profit margin of 12.34%, both indicating profitable operations. Revenue growth rate from the previous year is 8.46%, demonstrating robust growth potential. Furthermore, the EBIT margin of 19.40% and EBITDA margin of 23.68% underscore operational efficiency and effective cost management.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.60, indicating manageable leverage. The return on equity (ROE) is a healthy 14.48%, showcasing effective utilization of shareholders' equity to generate profits. The equity ratio of 52.85% suggests a solid equity base relative to total assets, providing a cushion against liabilities. However, there is slight concern about the declining equity trend over the years.72
Positive
Cash Flow
Cash flows are strong with a significant improvement in free cash flow growth rate at -7.04%, reflecting consistent cash generation capabilities. The operating cash flow to net income ratio of 1.29 demonstrates efficient conversion of net income into cash. The free cash flow to net income ratio is a robust 1.10, indicating strong cash surplus after capital expenditures. These metrics highlight effective cash management but suggest room for improvement in maintaining growth in free cash flow.78
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.69B | 1.58B | 1.45B | 1.39B | 1.11B | 1.05B | Gross Profit |
| 971.72M | 886.10M | 802.34M | 727.35M | 623.15M | 561.95M | EBIT |
| 327.53M | 217.05M | 168.17M | 163.11M | 161.48M | 142.26M | EBITDA |
| 399.63M | 335.56M | 326.29M | 264.45M | 210.80M | 345.70M | Net Income Common Stockholders |
| 208.26M | 136.78M | 93.36M | -29.83M | 70.03M | 243.54M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 193.96M | 219.31M | 273.69M | 346.97M | 494.61M | 509.48M | Total Assets |
| 2.72B | 2.74B | 2.81B | 3.03B | 3.05B | 2.23B | Total Debt |
| 864.61M | 847.85M | 896.19M | 1.07B | 1.29B | 516.79M | Net Debt |
| 670.65M | 628.55M | 622.50M | 719.76M | 799.28M | 16.27M | Total Liabilities |
| 1.28B | 1.37B | 1.35B | 1.52B | 1.75B | 915.41M | Stockholders Equity |
| 1.44B | 1.37B | 1.46B | 1.51B | 1.30B | 1.31B |
| Cash Flow | Free Cash Flow | ||||
| 229.49M | 246.88M | 165.90M | -20.63M | 143.53M | 63.55M | Operating Cash Flow |
| 269.15M | 295.77M | 202.91M | 10.42M | 192.20M | 107.69M | Investing Cash Flow |
| -37.87M | -47.85M | 12.74M | -551.63M | -56.69M | 382.52M | Financing Cash Flow |
| -226.28M | -301.80M | -288.51M | -424.48M | 676.47M | -256.11M |
Adtalem Global Education Technical Analysis
Negative
90.82
Price Trends
99.12
Negative
91.78
Negative
81.54
Positive
Market Momentum
-1.41
Positive
34.55
Neutral
23.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATGE, the sentiment is Negative. The current price of 90.82 is below the 20-day moving average (MA) of 101.58, below the 50-day MA of 99.12, and above the 200-day MA of 81.54, indicating a neutral trend. The MACD of -1.41 indicates Positive momentum. The RSI at 34.55 is Neutral, neither overbought nor oversold. The STOCH value of 23.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATGE.
Adtalem Global Education Risk Analysis
Adtalem Global Education disclosed 46 risk factors in its most recent earnings report. Adtalem Global Education reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Adtalem Global Education Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.50B | 16.93 | 14.63% | ― | 12.83% | 97.16% | |
75 Outperform | $5.80B | 20.60 | 22.95% | ― | 13.13% | 56.75% | |
70 Outperform | $7.31B | 52.98 | 11.26% | ― | 11.07% | 88.57% | |
70 Outperform | $4.97B | 22.04 | 30.13% | ― | 7.50% | 13.70% | |
68 Neutral | $2.04B | 17.85 | 6.80% | 2.88% | 7.68% | 61.28% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
47 Neutral | $90.15M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Consumer Cyclical Sector Average
Performance Comparison
ATGE
Adtalem Global Education
90.82
40.73
81.31%
LOPE
Grand Canyon Education
170.53
37.47
28.16%
LRN
Stride
123.22
61.97
101.18%
STRA
Strategic Education
83.33
-18.11
-17.85%
BFAM
Bright Horizons
127.20
10.74
9.22%
CHGG
Chegg
0.87
-7.33
-89.39%
Adtalem Global Education Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -11.33% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with significant revenue and enrollment growth, driven by strategic initiatives and digital transformation efforts. Despite some challenges in the Medical and Veterinary segment and marketing investment fluctuations, the overall financial health and future outlook remain robust, leading to raised fiscal guidance.Highlights
Significant Revenue Growth
Revenue grew by 14% to $448 million, with increases across all segments, particularly Chamberlain and Walden Universities.
Record Enrollment and Expansion
Total enrollment increased by 11.6% year-over-year, marking the 11th consecutive quarter of growth, with Chamberlain University enrollment up 11.5% and Walden University up 13.2%.
Increased Earnings and EBITDA Margin
Adjusted EBITDA margin expanded by 440 basis points, leading to a 47% increase in adjusted earnings per share to $1.81.
Strategic Initiatives Driving Performance
The Get the W campaign and innovative programs like the Believe and Achieve Scholarship contributed to increased student engagement and enrollment.
Digital Transformation and AI Integration
New digital initiatives and partnerships in AI, including the appointment of Michael Betz as Chief Digital Officer, are expected to drive future growth.
Raised Fiscal 2025 Guidance
Revenue guidance increased to $1.73 billion to $1.76 billion, with adjusted earnings per share expected to be $6.10 to $6.30.
Lowlights
Challenges in Medical and Veterinary Segment
Revenue only increased by 2.8%, with no change in student enrollment from the first quarter, representing slower growth compared to other segments.
Marketing Investment Fluctuations
Chamberlain's marketing investment was flat year-over-year, impacting the quarterly adjusted EBITDA margin profile.
Company Guidance
During the Adtalem Global Education Second Quarter 2025 Earnings Call, the company provided updated guidance reflecting its strong performance. Adtalem raised its fiscal 2025 revenue expectations to between $1.73 billion and $1.76 billion, indicating a growth of approximately 9% to 11% year-over-year. Additionally, the company forecasted adjusted earnings per share (EPS) to range from $6.10 to $6.30, representing an increase of approximately 21.5% to 25.5% compared to the previous year. The company is also anticipating more than 100 basis points of adjusted EBITDA margin expansion for the fiscal year, driven by significant improvements in operational efficiency and strategic investments. In the second quarter, Adtalem reported a 14% revenue increase to $448 million, an 11.6% rise in total enrollment, and a 47% increase in adjusted EPS to $1.81.Adtalem Global Education Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Stephen W. Beard Elected Chairman of Adtalem
Positive
Nov 19, 2024
Stephen W. Beard has been unanimously elected as the new Chairman of Adtalem Global Education Inc., a leading healthcare educator in the U.S. This move highlights his exceptional leadership and commitment to Adtalem’s mission of providing high-quality education and addressing healthcare labor shortages. Under Beard’s guidance, the company is expanding its impact, with over 90,000 students enrolled, primarily in healthcare programs, furthering the Growth with Purpose strategy.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.