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KinderCare Learning Companies Inc (KLC)
:KLC
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KinderCare Learning Companies Inc
(NYSE:KLC)
55Neutral
Positive Factors
Market Position
KLC is the #1 player in the child daycare market, considered an attractive industry.
Revenue Growth
KLC reported 4.7% revenue growth, which was in-line with Cons and ahead of MSe by 70bps.
Negative Factors
Government Subsidy Exposure
There is some uncertainty due to large government subsidy exposure following recent election results.
Guidance
KinderCare's earnings release lacked further guidance for the fourth quarter or fiscal year 2025, which disappointed investors.
KinderCare Learning Companies Inc (KLC) vs. S&P 500 (SPY)
Market Cap
$1.52B
Dividend YieldN/A
Average Volume (3M)596.53K
Price to Earnings (P/E)35.8
Beta (1Y)1.52
Revenue Growth6.09%
EPS Growth-191.19%
CountryUS
Employees43,690
SectorConsumer Defensive
Sector Strength63
IndustryEducation & Training Services
Share Statistics
EPS (TTM)-0.82
Shares Outstanding118,006,280
10 Day Avg. Volume941,624
30 Day Avg. Volume596,531
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.65
Price to Cash Flow (P/CF)N/A
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
$27.60Price Target Upside108.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
KinderCare Learning Companies Inc Business Overview & Revenue Model
Company DescriptionKinderCare Learning Companies, Inc. provides early childhood education and care services in the United States. The company offers infant, toddler, preschool, kindergarten, and before- and after-school programs in various categories comprising community-based and employer-sponsored early childhood education and care, and before- and after-school educational services. As of October 2, 2021, it served children ranging from 6 weeks to 12 years of age through 1,490 early childhood education centers with a licensed capacity of 195,000 and contracts for approximately 650 before-and after-school sites in 40 states and the District of Columbia. The company was founded in 1969 and is based in Portland, Oregon.
How the Company Makes MoneyKinderCare Learning Companies Inc makes money primarily through tuition and fees charged to parents for the enrollment of their children in its educational programs. These programs include full-time care, part-time care, and before-and-after school care, tailored to meet the needs of working families. The company also generates revenue from government subsidies and assistance programs that support families in need of child care services. Additionally, KinderCare may engage in partnerships with corporations to provide on-site child care services as part of employee benefits, further contributing to its revenue streams.
KinderCare Learning Companies Inc Financial Statement Overview
Summary
KinderCare Learning Companies Inc demonstrates solid revenue growth and operational efficiency, as reflected in its stable margins and effective use of equity. However, the high leverage and decreasing net income are potential concerns that need addressing to ensure sustainable financial health. Cash flow generation remains strong, aiding operational stability despite the decline in free cash flow.Income Statement
KinderCare Learning Companies Inc has shown strong revenue growth with a 15.9% increase from the previous year, and a consistent gross profit margin around 27.3%. However, there is a notable decline in net income by 53.2%, impacting the net profit margin which stands at 4.1%. The EBIT margin is healthy at 11.0%, suggesting efficient core operations.75
Positive
Balance Sheet
The company's balance sheet shows a high debt-to-equity ratio of 5.31, indicating higher leverage and potential risk. However, the return on equity is reasonable at 20.2%, suggesting that equity is being used effectively to generate profit. The equity ratio is low at 13.9%, reflecting limited equity financing.60
Neutral
Cash Flow
Cash flow analysis indicates a decline in free cash flow by 13.7%, which may affect future investments. The operating cash flow to net income ratio is robust at 2.96, suggesting strong operational cash generation relative to net income. The free cash flow to net income ratio is at 1.70, indicating sufficient free cash flow to support net income.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.29B | 2.51B | 2.17B | 1.81B | 1.37B | 1.88B | Gross Profit |
| 301.35M | 685.86M | 741.20M | 506.20M | 214.49M | 389.23M | EBIT |
| 103.03M | 275.29M | 389.47M | 212.40M | -30.80M | 88.31M | EBITDA |
| 166.02M | 391.86M | 477.73M | 295.36M | 18.48M | 164.65M | Net Income Common Stockholders |
| 28.79M | 102.56M | 219.17M | 88.41M | -129.50M | -29.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 53.23M | 156.15M | 105.21M | 177.25M | 53.23M | 40.34M | Total Assets |
| 3.27B | 3.65B | 3.66B | 3.47B | 3.27B | 3.30B | Total Debt |
| 2.85B | 2.69B | 1.36B | 1.40B | 2.85B | 2.75B | Net Debt |
| 2.80B | 2.54B | 1.26B | 1.22B | 2.80B | 2.71B | Total Liabilities |
| 3.13B | 3.15B | 3.26B | 3.21B | 3.13B | 3.06B | Stockholders Equity |
| 136.28M | 506.88M | 407.69M | 255.61M | 136.28M | 238.51M |
| Cash Flow | Free Cash Flow | ||||
| 1.53M | 174.50M | 202.18M | 116.40M | -34.60M | 22.97M | Operating Cash Flow |
| 82.46M | 303.54M | 341.61M | 183.29M | 13.59M | 117.33M | Investing Cash Flow |
| -64.02M | -117.66M | -299.73M | -80.15M | -48.48M | -94.49M | Financing Cash Flow |
| -9.40M | -134.94M | -117.66M | 20.87M | 47.77M | -8.67M |
KinderCare Learning Companies Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.50B | 21.13 | 22.95% | ― | 13.13% | 56.75% | |
78 Outperform | $1.66B | 11.52 | 16.39% | 1.98% | -4.05% | 1.50% | |
74 Outperform | $7.66B | 19.71 | 10.40% | ― | 34.42% | 28.54% | |
74 Outperform | $1.49B | 28.09 | 21.41% | ― | 14.70% | 275.89% | |
70 Outperform | $7.16B | 52.02 | 11.26% | ― | 11.07% | 88.57% | |
62 Neutral | $20.30B | 13.74 | -10.11% | 7.33% | 1.63% | 6.06% | |
55 Neutral | $1.52B | 35.79 | -13.54% | ― | 6.09% | -191.19% |
* Consumer Defensive Sector Average
Performance Comparison
KLC
KinderCare Learning Companies Inc
12.90
-15.14
-53.99%
PRDO
Perdoceo Education
25.25
7.91
45.62%
LRN
Stride
126.39
63.09
99.67%
EDU
New Oriental Education Tech
47.31
-37.86
-44.45%
UTI
Universal Technical Institute
26.53
11.35
74.77%
BFAM
Bright Horizons
125.18
12.35
10.95%
KinderCare Learning Companies Inc Earnings Call Summary
Earnings Call Date: Mar 20, 2025 | % Change Since: -25.17% | Next Earnings Date: Nov 19, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive sentiment with strong revenue growth, successful IPO completion, and significant debt reduction. However, concerns about flat occupancy and low tuition increase guidance slightly temper the outlook.Highlights
Strong Fourth Quarter Revenue Growth
Total revenues grew 5% year-over-year in Q4, with total adjusted EBITDA also increasing by 5%.
Initial Public Offering Success
KinderCare successfully completed its IPO in early October, marking a pivotal milestone for the company.
Champions Business Expansion
Champions business revenue grew 12% in Q4, with sites increasing by 8% over the year.
Positive Full-Year Performance
For the full year 2024, revenue grew to $2.7 billion, up 6% from 2023, and adjusted EBITDA increased by 12% year-over-year.
Significant Debt Reduction
KinderCare reduced its net debt significantly from $1.38 billion to $864 million by year-end 2024.
High Teacher Retention
KinderCare maintained high levels of teacher retention in 2024, underscoring a positive work culture.
Lowlights
Flat Occupancy Guidance for 2025
The company expects occupancy to remain relatively flat year-over-year in 2025, despite efforts to improve it.
Low Tuition Increase Guidance
KinderCare expects tuition increases at the low end of the 3% to 5% range for 2025, which may limit revenue growth.
Company Guidance
During the KinderCare fourth quarter earnings call for fiscal year 2024, CEO Paul Thompson and CFO Tony Amandi provided detailed guidance for 2025. The company anticipates revenue to range between $2.75 billion and $2.85 billion, reflecting a growth of 3% to 7% over the prior year. Adjusted EBITDA is expected to rise by 4% to 9%, landing between $310 million and $325 million. Additionally, adjusted EPS is forecasted to be between $0.75 and $0.85, marking an increase of $0.40 at the midpoint compared to 2024. The guidance includes a 53rd week, contributing an estimated $45 million to $50 million in revenue and $10 million to $12 million in adjusted EBITDA. The company also expects flat occupancy rates, with tuition rate growth anticipated at the lower end of their 3% to 5% long-term target, supported by stable hiring trends and strategic pricing. KinderCare plans to open 10 to 15 new centers in 2025, while continuing to pursue acquisitions, contributing 1% to 2% of revenue growth.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.