Perdoceo Education Corporation PRDO posted better-than-expected results in third-quarter 2024, with earnings and revenues surpassing the Zacks Consensus Estimate.

However, on a year-over-year basis, both metrics declined due to the lagging impact of 2023 operational changes at the American InterContinental University System (“AIUS”) and the simplification of professional development offerings at Colorado Technical University (“CTU”).

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Following the results, the company’s shares rose 7.4% in yesterday’s after-hours trading session. Positive Investor sentiments were witnessed as the company increased its 2024 guidance for adjusted operating income and adjusted earnings.

The company reported strong operating performance for the quarter, with both academic institutions showing solid student retention and engagement. Perdoceo remains focused on investing in student support resources and technology to enhance academic outcomes. The acquisition of the University of St. Augustine is on track to close in December, positioning the company to expand significantly in the health sciences sector and to serve a greater number of students.

PRDO’s Q3 Earnings & Revenue Discussion

Adjusted earnings of 59 cents per share surpassed the consensus mark of 53 cents by 11.3%, but decreased 7.8% from 64 cents in the year-ago quarter.

Revenues of $169.8 million beat the consensus mark of $164.6 million by 3.2%, but decreased 5.6% year over year.
 
As of Sept. 30, 2024, enrollment of total students rose 11% year over year to 40,400. Student enrollments under CTU and AIUS segments increased 13.6% and 4% year over year to 30,000 and 10,400, respectively.

In the quarter, adjusted operating income increased 2.8% from the prior-year quarter’s level to $48.6 million.

PRDO’s Segment Details

CTU: Revenues in this segment were down 4% from the year-ago quarter’s level, totaling $115.7 million.

Operating income increased 28.1% from the prior-year quarter’s level to $44.2 million. Operating margin expanded 960 basis points (bps) year over year to 38.2%.

AIUS: The segment generated revenues of $53.9 million, down 9% year over year.

Operating income was $9.1 million, down 41.9% year over year. Operating margin contracted 950 bps year over year to 16.8%.

PRDO’s Liquidity & Cash Flow

As of Sept. 30, 2024, Perdoceo had cash and cash equivalents of $238 million, up from $118 million at the end of 2023.

Net cash provided by operations was $144 million in the first nine months of 2024, up from $98.8 million a year ago.

Q4 Guidance of PRDO

In fourth-quarter 2024, the company expects adjusted operating income to be within $39-$42 million, up from $19.4 million reported in the year-ago quarter. Adjusted earnings per share is expected to be in the range of 46 cents to 49 cents compared with 27 cents in the year-ago quarter.

PRDO’s 2024 Guidance Raised

For 2024, PRDO now expects adjusted operating income within $188-$191 million (compared with $179-$190 million expected earlier), up from $174.9 million in 2023.

It now expects adjusted earnings of $2.25 to $2.28 per share compared with $2.13-$2.25 of earlier projection. The estimated figure indicates an increase from $2.10 per share reported in 2023

PRDO’s Zacks Rank & Peer Releases

Perdoceo currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adtalem Global Education Inc. ATGE posted better-than-expected results in first-quarter fiscal 2025. Earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year, given strong enrollment growth and strategic initiatives.

The company raised its fiscal 2025 guidance, expecting revenues between $1.69 billion and $1.73 billion, indicating confidence in sustained growth momentum.

Strategic Education, Inc. STRA reported impressive results for third-quarter 2024. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.

The company witnessed strong employer-affiliated enrollment in the U.S. Higher Education segment, strong growth from Sophia subscriptions in the Education Technology Services segment and another quarter of total enrollment growth in the Australia/New Zealand segment.

Lincoln Educational Services Corporation LINC reported mixed results for third-quarter 2024. Its earnings missed the Zacks Consensus Estimate, but revenues topped the same.

Nonetheless, both metrics increased year over year, driven by a 10.6% increase in the average student population. This uptick resulted from four consecutive quarters of double-digit start growth and the recently opened East Point, GA campus, which generated $3.4 million in revenues in the third quarter.

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