Earnings Performance - Quarterly earnings of $1.81 per share, beating the Zacks Consensus Estimate of $1.39 per share, representing a 30.22% earnings surprise [1] - Year-over-year earnings growth from $1.23 per share to $1.81 per share [1] - Previous quarter earnings of $1.29 per share, surpassing the expected $1.12 per share with a 15.18% surprise [1] - Company has surpassed consensus EPS estimates in the last four quarters [2] Revenue Performance - Quarterly revenues of $447.73 million, exceeding the Zacks Consensus Estimate by 4.38% [2] - Year-over-year revenue growth from $393.24 million to $447.73 million [2] - Company has topped consensus revenue estimates in the last four quarters [2] Stock Performance - Adtalem shares have gained 9.9% since the beginning of the year, outperforming the S&P 500's 2.7% gain [3] - Stock's immediate price movement depends on management's commentary on the earnings call [3] Earnings Outlook - Current consensus EPS estimate for the coming quarter is $1.68 on $438.91 million in revenues [7] - Current fiscal year consensus EPS estimate is $5.89 on $1.72 billion in revenues [7] - Estimate revisions trend for Adtalem is mixed, translating into a Zacks Rank 3 (Hold) [6] Industry Context - Schools industry is currently in the top 32% of the 250 plus Zacks industries [8] - Top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] Peer Comparison - Strategic Education (STRA) expected to report quarterly earnings of $1.19 per share, a year-over-year decline of 29.2% [9] - Strategic Education's revenues expected to be $311.96 million, up 3.1% from the year-ago quarter [10] - Strategic Education's results for the quarter ended December 2024 expected to be released on February 27 [9]

Revenue Growth - Adtalem's revenue increased 13.9%, or $54.5 million, to $447.7 million in Q2 FY2025 compared to the prior year period, driven by increased revenue across all segments [149]. - Chamberlain revenue increased 17.9%, or $27.4 million, to $181.0 million in Q2 FY2025, driven by higher enrollment and tuition rates [151]. - Walden revenue increased 16.7%, or $24.5 million, to $171.3 million in Q2 FY2025, supported by increased enrollment and higher tuition rates [153]. - Fiscal year 2025 consolidated revenue increased by 9.4% to $372.6 million compared to the prior year [160]. Net Income and Earnings - Net income rose 90.2%, or $36.0 million, to $75.9 million in Q2 FY2025, primarily due to increased revenue and decreased litigation reserves [149]. - Diluted earnings per share increased 102.0%, or $1.00, to $1.98 in Q2 FY2025, attributed to the rise in net income and lower diluted shares from share repurchases [149]. - The company reported a net income of $122.0 million for the six months ended December 31, 2024, compared to $50.5 million in the same period of 2023 [219]. - Adjusted earnings per share (non-GAAP) for Q2 2024 was $1.81, up from $1.23 in Q2 2023, reflecting a 47% increase [220]. Enrollment Statistics - Total student enrollment at Chamberlain increased 11.5% for the November 2024 session compared to the same session last year [149]. - Walden's total student enrollment increased 13.2% as of December 31, 2024, compared to December 31, 2023 [149]. Operating Income - Consolidated operating income increased by 100.6%, or $87.3 million, to $174.1 million in the first six months of fiscal year 2025 [168]. - Chamberlain operating income increased 42.5%, or $12.6 million, to $42.2 million in the second quarter of fiscal year 2025 [172]. - Walden operating income increased 126.4%, or $27.3 million, to $48.9 million in the second quarter of fiscal year 2025 [173]. - Adjusted operating income for Chamberlain increased by 30.0% to $70.1 million in the first six months of fiscal year 2025 [168]. Expenses and Costs - Cost of educational services rose by 9.4%, or $31.9 million, to $372.6 million in the first six months of fiscal year 2025 [160]. - Student services and administrative expense increased by 0.8%, or $1.3 million, to $156.9 million in the second quarter of fiscal year 2025 [164]. - As a percentage of revenue, cost of educational services decreased to 43.1% in the first six months of fiscal year 2025 from 44.7% in the prior year [161]. - Student services and administrative expense as a percentage of revenue decreased to 36.5% in the first six months of fiscal year 2025 from 42.2% in the prior year [165]. Share Repurchase and Capital Expenditures - Adtalem repurchased 471,327 shares at an average cost of $79.60 per share during Q2 FY2025, with future repurchases dependent on market conditions [149]. - Capital expenditures for the six months ended December 31, 2024, were $21.1 million, compared to $19.6 million in the same period of 2023, with expectations for full fiscal year 2025 capital spending to be in the range of $55 to $65 million [202]. Tax and Other Financial Metrics - Effective tax rate from continuing operations increased to 22.8% in the three months ended December 31, 2024, compared to 17.1% in the prior year period [179]. - Interest expense decreased to $13.9 million in the second quarter of fiscal year 2025 from $16.7 million in the prior year period [175]. - Other income, net decreased to $2.2 million in the second quarter of fiscal year 2025 from $3.6 million in the prior year period [176]. Indemnification and Restructuring - The company received a $5.6 million indemnification claim in the second quarter of fiscal year 2025 [170]. - Restructuring expenses increased to $2.4 million in the first six months of fiscal year 2025 compared to $0.7 million in the prior year [166].

Enrollment Growth - Total enrollment increased by 11.6% year-over-year, reaching 91,264 students[1] - Chamberlain University reported an 11.5% increase in enrollment, achieving the highest total enrollment in its history[5] - Walden University experienced a 13.2% increase in enrollment, marking its sixth consecutive quarter of growth[5] - Chamberlain University enrolled over 3,000 MSN-PMHNP students, addressing critical healthcare workforce shortages[5] Revenue and Earnings - Revenue for the second quarter was $447.7 million, reflecting a 13.9% increase compared to the prior year[5] - Total consolidated revenue for the three months ended December 31, 2024, was $447.729 million, representing a 13.9% increase from $393.242 million in the same period of 2023[26] - Fiscal year 2025 revenue guidance was raised to a range of $1,730 million to $1,760 million, indicating approximately 9.0% to 11.0% growth year-over-year[10] - Adjusted earnings per share guidance for fiscal year 2025 is projected to be between $6.10 and $6.30, representing a growth of approximately 21.5% to 25.5% year-over-year[10] Income and Profitability - Diluted earnings per share were $1.98, with adjusted EPS at $1.81, marking a 47.2% growth year-over-year[1] - Operating income for the same period increased by 77.2% to $103.870 million, compared to $58.612 million in the prior year[26] - Income from continuing operations for the six months ended December 31, 2024, was $117.421 million, up from $49.672 million in 2023, marking a significant increase of 136.1%[24] - Basic earnings per share from continuing operations rose to $3.12 for the six months ended December 31, 2024, compared to $1.22 in the same period of 2023, reflecting a 155.7% increase[26] Segment Performance - Chamberlain segment revenue increased by 17.9% to $180.986 million for the three months ended December 31, 2024, from $153.553 million in 2023[26] - Walden segment revenue grew by 16.7% to $171.306 million for the three months ended December 31, 2024, compared to $146.808 million in the same period of 2023[26] Cash Flow and Financial Position - Cash, cash equivalents, and restricted cash at the end of the period were $195.419 million, down from $221.202 million at the beginning of the period[24] - The company reported a net cash provided by operating activities of $70.297 million for the six months ended December 31, 2024, compared to $81.868 million in 2023[24] - Free cash flow (non-GAAP) for Adtalem Global Education was $188,887,000 for the twelve months ended FY24 Q2, showing strong cash generation capabilities[44] Operating Income and Margins - Adtalem Global Education's GAAP operating income rose by 77.2% to $103,870,000 for the three months ended December 31, 2024, compared to $58,612,000 in 2023[36] - Walden's GAAP operating income surged by 126.4% to $48,898,000 for the three months ended December 31, 2024, from $21,598,000 in 2023[36] - Operating margin (GAAP) for Adtalem improved to 23.2% in Q4 2024 from 14.9% in Q4 2023[36] - Walden's operating margin (GAAP) increased to 28.5% for the three months ended December 31, 2024, compared to 14.7% in 2023[36] Adjusted Metrics - Adjusted EBITDA was $125.0 million, up 35.1% year-over-year, with an adjusted EBITDA margin of 27.9%[5] - Adjusted EBITDA for Adtalem Global Education increased by 35.1% to $125,012,000 for the three months ended December 31, 2024, compared to $92,555,000 in the same period of 2023[40] - Adjusted net income (non-GAAP) for Adtalem Global Education was $69,398,000 for the three months ended December 31, 2024, reflecting an increase from $50,268,000 in the same period of 2023[40] Debt and Expenses - Long-term debt as of December 31, 2024, stood at $658.283 million[46] - Net debt (non-GAAP) after accounting for cash and cash equivalents was $464.325 million[46] - Interest expense incurred during the period was $59.7 million[46] - Provision for income taxes amounted to $48.84 million[46] - Depreciation and amortization expenses totaled $66.875 million[46] - Stock-based compensation expenses were $33.36 million[46] - Restructuring expenses recorded were $3.542 million[46]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific companies, Adtalem Global Education (ATGE) and Strategic Education (STRA), as strong value stock picks based on their financial metrics and Zacks Rank system [2][9]. Company Analysis: Adtalem Global Education (ATGE) - ATGE has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4]. - The Forward P/E ratio for ATGE is 14.67, which is lower than the industry average of 16.62. Over the past year, ATGE's Forward P/E has fluctuated between 8.93 and 14.91, with a median of 12.32 [4]. - The P/B ratio for ATGE is 2.50, compared to the industry average of 3.19. Its P/B has ranged from 1.30 to 2.50 over the past year, with a median of 1.88 [5]. - ATGE's P/CF ratio stands at 13.13, significantly lower than the industry average of 43.81. The P/CF has varied between 7.52 and 13.13 over the past year, with a median of 10.90 [6]. Company Analysis: Strategic Education (STRA) - STRA also holds a Zacks Rank of 2 (Buy) and a Value score of A, making it another attractive value stock [7]. - The Forward P/E ratio for STRA is 19.26, while its PEG ratio is 1.28, both of which are favorable compared to the industry averages of 16.62 and 0.86, respectively [7]. - Over the past year, STRA's P/E has ranged from 16.17 to 27.11, with a median of 20.26. The PEG ratio has fluctuated between 0.85 and 1.32, with a median of 0.82 [8]. - STRA's P/B ratio is 1.32, significantly lower than the industry average of 3.19. This ratio has varied from 1.23 to 1.84 over the past year, with a median of 1.42 [8]. Conclusion - Both Adtalem Global Education and Strategic Education are identified as likely undervalued stocks based on their financial metrics and earnings outlook, making them strong candidates for value investors [9].

Core Viewpoint - Adtalem Global Education (ATGE) has shown strong stock performance, reaching a 52-week high and outperforming its sector and industry benchmarks in terms of stock returns [1][2]. Financial Performance - Adtalem reported earnings per share (EPS) of $1.29 in its latest earnings report, exceeding the consensus estimate of $1.12, and beat revenue estimates by 4.82% [2]. - For the current fiscal year, Adtalem is projected to achieve EPS of $5.89 on revenues of $1.72 billion, reflecting a 17.56% increase in EPS and an 8.46% increase in revenues [3]. - The next fiscal year forecasts an EPS of $6.74 on revenues of $1.82 billion, indicating a year-over-year change of 14.43% in EPS and 5.95% in revenues [3]. Valuation Metrics - Adtalem's current valuation metrics show it trading at 15.8 times the current fiscal year EPS estimates, slightly below the peer industry average of 15.9 times [7]. - On a trailing cash flow basis, the stock trades at 11.1 times compared to the peer group's average of 12 times, with a PEG ratio of 1.05 [7]. Investment Style Scores - Adtalem has received a Value Score of A, a Growth Score of A, and a Momentum Score of C, resulting in a combined VGM Score of A [6]. - The Zacks Rank for Adtalem is 2 (Buy), supported by favorable earnings estimate revisions from analysts [8]. Conclusion - Given the positive earnings surprises, strong financial projections, and favorable valuation metrics, Adtalem appears to have potential for further stock price appreciation in the near term [2][3][8].

Core Insights - The Zacks Consensus Estimate for Adtalem Global Education Inc. (ATGE) fiscal 2025 earnings per share has increased from $5.72 to $5.89, indicating a year-over-year growth of 17.6% [1] - The healthcare sector in the U.S. is experiencing a growing demand, coupled with a significant talent shortage, which Adtalem aims to address through its agile operating model and collaboration with Hippocratic AI [2] - Adtalem's Growth With Purpose strategy focuses on organic revenue growth, targeting a compound annual growth rate of 4% to 6% and adjusted EBITDA margin expansion of over 200 basis points by fiscal 2026 [7] Financial Performance - Adtalem's revenue guidance for fiscal 2025 has been revised to a range of $1,690 million to $1,730 million, up from the previous estimate of $1,660 million to $1,700 million [18] - The company reported a trailing 12-month return on equity (ROE) of 15.6%, outperforming the industry average of 9.4%, indicating efficient use of shareholder funds [13] Enrollment and Growth Trends - In the first quarter of fiscal 2025, Adtalem saw a year-over-year enrollment increase of 12.2% at Walden University and 11.7% at Chamberlain University, driven by strong demand in healthcare programs [12] - The overall growth in the healthcare sector is expected to continue supporting Adtalem's growth trajectory through fiscal 2025 into fiscal 2026 [12] Capital Allocation - Adtalem employs a balanced capital allocation strategy, utilizing free cash flow for business investments while also rewarding shareholders through share repurchases and dividends [3] - In the first quarter of fiscal 2025, the company repurchased 462,063 shares at an average price of $73.39 per share [3]

Core Viewpoint - The article discusses the effectiveness of a "Recent Price Strength" screen for identifying stocks with strong fundamentals and upward price trends, highlighting Adtalem Global Education (ATGE) as a potential investment opportunity due to its recent price performance and bullish indicators [1][2][3]. Group 1: Price Performance - Adtalem Global Education (ATGE) has experienced a solid price increase of 23.4% over the past 12 weeks, indicating strong investor interest [2]. - The stock has maintained a price increase of 0.3% over the last four weeks, suggesting that the upward trend is still intact [3]. - ATGE is currently trading at 96.2% of its 52-week high-low range, indicating a potential breakout [3]. Group 2: Fundamental Strength - ATGE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [4]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [5]. Group 3: Investment Strategy - The article emphasizes the importance of confirming the sustainability of price trends through sound fundamentals and positive earnings revisions to avoid potential losses [9]. - The "Recent Price Strength" screen is one of several tools available for investors to identify stocks that may yield profitable results [10].

Core Insights - Value investing remains a preferred strategy for identifying strong stocks across various market conditions [1] - Adtalem Global Education (ATGE) is highlighted as a potential value investment opportunity [4][6] Valuation Metrics - ATGE's Price-to-Book (P/B) ratio is 2.32, which is lower than the industry average of 3.20 [2] - Over the past 12 months, ATGE's P/B ratio fluctuated between 1.30 and 2.47, with a median of 1.87 [2] - The stock's Price-to-Earnings (P/E) ratio is 13.67, compared to the industry's average of 16.33 [4] - ATGE's Forward P/E ratio ranged from 8.93 to 14.91 over the past 52 weeks, with a median of 12.32 [4] Investment Ratings - ATGE holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4][5] - The Zacks Style Scores system identifies stocks with high Value grades and strong Zacks Ranks as top value picks [5] Earnings Outlook - The strength of ATGE's earnings outlook contributes to its classification as an impressive value stock [6]

Industry Overview - The U.S. education market is expected to experience significant growth by 2025, driven by changes in industry demand, government initiatives, and technological advancements [1] - The U.S. higher education market, valued at $6 billion in 2024, is projected to grow to $16.8 billion by 2033, with a CAGR of 12.2% from 2025 onward [2] - Government initiatives, including student loans and funding for community colleges, are improving accessibility and affordability in high-demand fields like data science and cybersecurity [3] Growth Drivers - The rise of e-learning platforms is enabling institutions to offer a broader range of programs without the limitations of physical infrastructure, catering to students seeking flexible, career-aligned educational pathways [2] - The use of AI in education is increasing, enhancing personalized learning and preparing students for STEM careers [5] - The influx of international students is expected to contribute to the competitiveness and expansion of the U.S. education market [6] - There is a growing demand for healthcare education due to a shortage of skilled professionals, prompting education providers to expand programs in nursing and medical technology [7] - Alternative credentials, such as certificates and apprenticeships, are becoming popular as students prioritize flexible and cost-effective learning options [8] Company Insights - Several for-profit education stocks are identified as poised to benefit from the growing demand for specialized education, including Stride, Inc. (LRN), Universal Technical Institute, Inc. (UTI), Strategic Education, Inc. (STRA), Lincoln Educational Services Corporation (LINC), and Adtalem Global Education Inc. (ATGE) [9] - Stride, Inc. has seen a 76.9% increase in stock price over the past year, with an expected earnings growth of 41.6% for fiscal 2025 [10] - Universal Technical Institute has experienced a 119.9% stock price increase, with a projected earnings growth of 29.3% for fiscal 2025 [11] - Strategic Education has a stock price increase of 3.9% and an expected earnings growth of 17.7% for 2025 [12] - Lincoln Educational Services has risen 55.8% in stock price, with an expected earnings growth of 27.8% for 2025 [13] - Adtalem Global Education has rallied 45% in stock price, with an expected earnings growth of 17.6% for fiscal 2025 [14]

The U.S. education sector has seen diverse growth fueled by factors such as the growing popularity of e-books, the expansion of online learning platforms, increased demand for healthcare professionals, advancements in technology, the adoption of hybrid teaching models, and strategic acquisitions targeting global expansion. Despite these advancements, companies within the Zacks Schools industry face challenges, including higher advertising and marketing costs, expenses tied to online education, and the emerg ...