Perdoceo Education (PRDO) recently reported better-than-anticipated quarterly results, with a 14.0% decline in revenue to $168.3 million due to a drop in student enrollments at its American InterContinental University System (AIUS). However, the company saw increased enrollments at its Colorado Technical University and strong student retention at both academic institutions. Adjusted earnings rose 3.4% to 60 cents per share, surpassing Barrington Research’s forecast of 53 cents per share. The company also generated $53.3 million in free cash flow during the quarter, allowing for the initiation of a dividend payout and share repurchases.
PRDO’s massive cash hoard increased to $642.4 million, representing $9.61 of net cash per share and about 40% of the stock’s current price even after a 30% increase post-earnings. The company’s full-year guidance predicts continued free-cash generation, with substantial enrollment growth expected due to high levels of student retention and engagement. PRDO raised its earnings outlook for the year to $2.11-$2.27 per share, implying an acceleration in bottom-line growth to over 4%. While the recent surge in the stock may lead to profit-taking, the company’s momentum is expected to continue.
Perdoceo Education (PRDO) is recommended as a stock in the Forbes Investor investment newsletter, with Julius Juenemann, CFA serving as the equity analyst and associate editor. The company’s strong quarterly performance, increased earnings outlook, and significant free-cash generation indicate positive growth potential. PRDO’s history of outperforming projections suggests that its actual growth and cash flow may exceed expectations. The recent momentum in the stock is expected to endure, making it a promising investment opportunity for investors looking for undervalued stocks with significant upside potential.
Investors interested in accessing recommendations like PRDO through the Forbes Investor newsletter can subscribe to gain insight into potential stock picks with attractive growth prospects. With PRDO’s solid operating performance driving earnings growth and cash flow generation, the company is positioned for continued success in the education sector. The increased enrollments at its academic institutions, along with cost-saving measures and interest income on its cash balance, contribute to PRDO’s financial strength and outlook for the remainder of the year.
PRDO’s strong performance in the first quarter, driven by increased enrollments at Colorado Technical University and strong student retention at both academic institutions, positions the company for continued growth and success. The significant free-cash generation and increased earnings outlook demonstrate PRDO’s ability to navigate challenges and capitalize on opportunities in the education sector. As a recommended stock in the Forbes Investor newsletter, PRDO offers investors a promising investment opportunity with potential for long-term growth and value appreciation. Subscribe to Forbes Investor to access more undervalued gems like PRDO and discover investment opportunities with significant upside potential.
