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Universal Technical Institute (UTI)
NYSE:UTI
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Universal Technical Institute
(NYSE:UTI)
75Outperform
Positive Factors
Financial Performance
Universal Technical Institute reported financial results of its fiscal first quarter that topped expectations by a wide margin and FY/25 guidance was raised.
Student Enrollment
New student starts grew significantly with positive impacts from previous quarter actions and marketing efforts, leading to strong growth in both UTI and Concorde segments.
Negative Factors
Stock Valuation
The stock is trading at a premium to its postsecondary education peer group and its closest trade school comp.
Universal Technical Institute (UTI) vs. S&P 500 (SPY)
Market Cap
$1.39B
Dividend YieldN/A
Average Volume (3M)792.14K
Price to Earnings (P/E)26.3
Beta (1Y)1.36
Revenue Growth14.70%
EPS Growth275.89%
CountryUS
Employees3,700
SectorIndustrials
Sector Strength72
IndustryEducation
Share Statistics
EPS (TTM)0.97
Shares Outstanding54,371,710
10 Day Avg. Volume898,994
30 Day Avg. Volume792,141
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)N/A
Price to Sales (P/S)1.88
Price to Cash Flow (P/CF)15.50
P/FCF Ratio15.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$33.60Price Target Upside25.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Universal Technical Institute Business Overview & Revenue Model
Company DescriptionUniversal Technical Institute (UTI) is a leading provider of post-secondary education for students pursuing careers as professional automotive, diesel, collision repair, motorcycle, marine, and CNC machining technicians. With campuses across the United States, UTI offers specialized technical training programs designed to equip students with the necessary skills and knowledge required by the transportation and manufacturing industries. The institute's curriculum is centered around hands-on training and industry-aligned education, ensuring that graduates are workforce-ready and meet current industry standards.
How the Company Makes MoneyUniversal Technical Institute (UTI) generates revenue primarily through tuition fees paid by students for enrollment in its various training programs. These fees cover the cost of instruction, access to facilities, and materials required for completing the technical courses. UTI also receives funding through partnerships with industry leaders who provide equipment, training resources, and potential employment opportunities to students, enhancing the educational experience and increasing the institute's appeal to prospective students. Additionally, some revenue may be derived from ancillary services, such as student housing and career placement services, which further support student success and satisfaction.
Universal Technical Institute Financial Statement Overview
Summary
Universal Technical Institute demonstrates strong financial health across its income statement, balance sheet, and cash flow statement. The company is experiencing notable revenue and profitability growth, coupled with effective cash flow management. While the balance sheet shows a moderate reliance on debt, the overall financial position remains stable. These factors contribute to a solid outlook for the company's future financial performance.Income Statement
Universal Technical Institute has shown a solid growth trajectory in its income statement. The TTM (Trailing-Twelve-Months) revenue growth rate is impressive, with a significant increase from the previous years. Gross and net profit margins have improved, indicating better operational efficiency and profitability. The EBIT and EBITDA margins are strong, reflecting a healthy operational performance. Overall, the company demonstrates robust revenue growth and profitability, enhancing its income statement strength.82
Very Positive
Balance Sheet
The balance sheet of Universal Technical Institute reflects stability with some areas of concern. The debt-to-equity ratio is moderate, suggesting a balanced approach to leverage. The return on equity (ROE) indicates effective utilization of shareholder's equity to generate profits. However, the equity ratio is relatively low, implying a higher reliance on debt in the capital structure. Nonetheless, the company maintains a reasonable balance between assets and liabilities, contributing to a stable financial position.75
Positive
Cash Flow
The cash flow statement of Universal Technical Institute shows positive aspects, with a notable increase in free cash flow over the TTM period. The operating cash flow to net income ratio is strong, signifying efficient cash generation relative to profits. Additionally, the free cash flow to net income ratio highlights the company's ability to convert profits into cash. However, the capital expenditure remains a considerable outflow, which could impact future cash balances. Overall, the cash flow statement reflects healthy cash generation, supporting financial flexibility.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 759.42M | 732.69M | 607.41M | 418.76M | 335.08M | 300.76M | Gross Profit |
| 467.30M | 348.16M | 277.54M | 211.53M | 168.26M | 144.83M | EBIT |
| 72.14M | 58.89M | 21.40M | 22.37M | 14.95M | -2.58M | EBITDA |
| 127.74M | 116.89M | 72.73M | 55.03M | 45.09M | 34.84M | Net Income Common Stockholders |
| 53.77M | 42.00M | 12.32M | 25.85M | 14.58M | 8.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 172.00M | 161.90M | 151.55M | 95.37M | 133.72M | 114.86M | Total Assets |
| 753.76M | 744.58M | 740.68M | 552.91M | 512.57M | 441.98M | Total Debt |
| 261.74M | 294.75M | 349.62M | 209.80M | 198.03M | 157.75M | Net Debt |
| 89.74M | 132.84M | 198.08M | 143.35M | 64.31M | 80.95M | Total Liabilities |
| 473.78M | 484.34M | 514.72M | 337.51M | 324.04M | 265.46M | Stockholders Equity |
| 279.98M | 260.23M | 225.97M | 215.40M | 188.53M | 176.52M |
| Cash Flow | Free Cash Flow | ||||
| 74.23M | 61.60M | -7.54M | -33.43M | -6.40M | 1.77M | Operating Cash Flow |
| 98.02M | 85.89M | 49.15M | 46.03M | 55.19M | 11.03M | Investing Cash Flow |
| -23.50M | -24.00M | -44.07M | -134.60M | -22.95M | -45.76M | Financing Cash Flow |
| -45.59M | -51.34M | 81.85M | 12.59M | 24.82M | 43.09M |
Universal Technical Institute Technical Analysis
Positive
26.77
Price Trends
26.97
Negative
24.20
Positive
20.29
Positive
Market Momentum
-0.21
Positive
47.75
Neutral
32.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UTI, the sentiment is Positive. The current price of 26.77 is below the 20-day moving average (MA) of 27.46, below the 50-day MA of 26.97, and above the 200-day MA of 20.29, indicating a neutral trend. The MACD of -0.21 indicates Positive momentum. The RSI at 47.75 is Neutral, neither overbought nor oversold. The STOCH value of 32.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UTI.
Universal Technical Institute Risk Analysis
Universal Technical Institute disclosed 42 risk factors in its most recent earnings report. Universal Technical Institute 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
Universal Technical Institute Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.35B | 16.75 | 14.63% | ― | 12.83% | 97.16% | |
75 Outperform | $1.39B | 26.30 | 21.41% | ― | 14.70% | 275.89% | |
75 Outperform | $5.26B | 20.19 | 22.95% | ― | 13.13% | 56.75% | |
74 Outperform | $2.89B | 9.87 | 30.98% | ― | 5.55% | 185.01% | |
70 Outperform | $4.82B | 21.69 | 30.13% | ― | 7.50% | 13.70% | |
68 Neutral | $2.02B | 17.85 | 6.80% | 2.91% | 7.68% | 61.28% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% |
* Industrials Sector Average
Performance Comparison
UTI
Universal Technical Institute
26.77
11.60
76.47%
ATGE
Adtalem Global Education
93.66
43.62
87.17%
LOPE
Grand Canyon Education
168.05
35.57
26.85%
LRN
Stride
119.54
57.72
93.37%
STRA
Strategic Education
79.99
-20.78
-20.62%
LAUR
Laureate Education
19.09
5.50
40.47%
Universal Technical Institute Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -5.71% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong performance with significant revenue growth, increased student enrollment, and successful strategic partnerships despite minor disruptions from external factors such as the California wildfires and FAFSA delays. The guidance for fiscal 2025 was raised, suggesting confidence in continued growth.Highlights
Strong Revenue Growth
Revenue for the quarter grew over 15% year-over-year to $201.4 million.
Increase in Student Enrollment
Average full-time active students increased 11% year-over-year to 25,062 students.
Net Income and Earnings Per Share Growth
Net income increased $22.2 million with diluted earnings per share of $0.40.
Adjusted EBITDA Improvement
Adjusted EBITDA improved 45% year-over-year to $35.5 million.
Increase in New Student Starts
Total new student starts increased year-over-year by over 22% for the quarter.
Expansion and Strategic Investments
Plans to launch 10 cash pay short course programs across Concorde campuses and a new nursing program in Jacksonville, Florida.
Tesla Partnership
Added Tesla to manufacturer-specific advanced training programs, with the start program for collision repair at UTI’s Long Beach campus.
Raised Guidance for Fiscal 2025
Consolidated revenue expected between $810 million and $820 million, reflecting approximately 11% increase year-over-year.
Lowlights
Impact of California Wildfires
Limited impact to Southern California campuses with a slight dip in attendance due to commuter disruptions.
FAFSA Delays Impact
Start deferrals from the fourth quarter into Q1 due to FAFSA delays.
Increased Expenses Anticipated
Shifted some strategic initiatives planned for Q1 into Q2, leading to anticipated higher expenses in Q2 and throughout the year.
Company Guidance
In the Universal Technical Institute's Q1 2025 earnings call, the company announced substantial growth and raised its guidance for the fiscal year. Revenue increased by over 15% year-over-year to $201.4 million, driven by an 11% rise in average full-time active students to 25,062 and a 22% increase in new student starts. Net income rose to $22.2 million, with diluted earnings per share at $0.40, and adjusted EBITDA saw a significant 45% year-over-year improvement to $35.5 million. The company attributed its robust performance to strategic investments in marketing and admissions, particularly in its Concorde division, and the successful integration of its programs. Looking ahead, UTI raised its fiscal 2025 guidance, forecasting consolidated revenue of $810-$820 million, adjusted EBITDA between $122-$126 million, and new student starts ranging from 28,500 to 29,500. The company remains focused on growth strategies, including program expansions, new campus openings, and potential M&A activity, particularly in the healthcare sector.Universal Technical Institute Corporate Events
Business Operations and StrategyFinancial Disclosures
Universal Technical Institute Reports Strong Q1 Financial Results
Positive
Feb 5, 2025
On February 5, 2025, Universal Technical Institute announced its financial results for the fiscal 2025 first quarter, reporting a significant increase in revenue and net income compared to the previous year. The company attributed this growth to strategic investments, increased student enrollment, and program expansions. The company raised its fiscal 2025 guidance, indicating a strong financial outlook and alignment with its strategic goals. The company is focused on leveraging its strong balance sheet and strategic investments to meet its growth targets, expecting to generate increased revenue and student enrollments throughout the year.
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.