Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Bright Horizons (NYSE: BFAM) and its peers.
A whole industry has emerged to address the problem of rising education costs, offering consumers alternatives to traditional education paths such as four-year colleges. These alternative paths, which may include online courses or flexible schedules, make education more accessible to those with work or child-rearing obligations. However, some have run into issues around the value of the degrees and certifications they provide and whether customers are getting a good deal. Those who don’t prove their value could struggle to retain students, or even worse, invite the heavy hand of regulation.
The 8 education services stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.4% on average since the latest earnings results.
Bright Horizons (NYSE: BFAM)
Founded in 1986, Bright Horizons (NYSE: BFAM) is a global provider of child care, early education, and workforce support solutions.
Bright Horizons reported revenues of $665.5 million, up 6.9% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
“We are pleased with our solid start to the year,” said Stephen Kramer, Chief Executive Officer.
Bright Horizons delivered the weakest performance against analyst estimates of the whole group. The stock is down 4.1% since reporting and currently trades at $121.50.
Is now the time to buy Bright Horizons? Access our full analysis of the earnings results here, it’s free.
Best Q1: Strategic Education (NASDAQ: STRA)
Formed through the merger of Strayer Education and Capella Education in 2018, Strategic Education (NASDAQ: STRA) is a career-focused higher education provider.
Strategic Education reported revenues of $303.6 million, up 4.6% year on year, outperforming analysts’ expectations by 1%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 7.3% since reporting. It currently trades at $86.09.
Is now the time to buy Strategic Education? Access our full analysis of the earnings results here, it’s free.
Slowest Q1: Grand Canyon Education (NASDAQ: LOPE)
Founded in 1949, Grand Canyon Education (NASDAQ: LOPE) is an educational services provider known for its operation at Grand Canyon University.
Grand Canyon Education reported revenues of $289.3 million, up 5.3% year on year, exceeding analysts’ expectations by 0.8%. It was a satisfactory quarter as it also posted EPS guidance for next quarter exceeding analysts’ expectations but a miss of analysts’ students estimates.
Interestingly, the stock is up 1.8% since the results and currently trades at $188.73.
Read our full analysis of Grand Canyon Education’s results here.
Perdoceo Education (NASDAQ: PRDO)
Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ: PRDO) is an educational services company that specializes in postsecondary education.
Perdoceo Education reported revenues of $213 million, up 26.6% year on year. This number surpassed analysts’ expectations by 2.4%. Overall, it was a strong quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations.
Perdoceo Education pulled off the fastest revenue growth among its peers. The stock is up 26.6% since reporting and currently trades at $31.86.
Read our full, actionable report on Perdoceo Education here, it’s free.
Adtalem (NYSE: ATGE)
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE: ATGE) is a global provider of workforce solutions and educational services.
Adtalem reported revenues of $466.1 million, up 12.9% year on year. This print beat analysts’ expectations by 4.4%. It was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.
The stock is up 7.1% since reporting and currently trades at $124.40.
Read our full, actionable report on Adtalem here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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