Core Insights - Investors in the Schools sector should consider Perdoceo Education (PRDO) and Universal Technical Institute (UTI) for potential value opportunities [1] Valuation Metrics - Perdoceo Education has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Universal Technical Institute, which has a Zacks Rank of 3 (Hold) [3] - PRDO's forward P/E ratio is 13.29, significantly lower than UTI's forward P/E of 25.95, suggesting PRDO may be undervalued [5] - The PEG ratio for PRDO is 0.89, while UTI's PEG ratio is 1.73, indicating PRDO's expected earnings growth is more favorable [5] - PRDO's P/B ratio is 2.21, compared to UTI's P/B of 4.88, further supporting PRDO's valuation attractiveness [6] Value Grades - Based on various valuation metrics, PRDO holds a Value grade of A, while UTI has a Value grade of C, indicating PRDO is viewed as a better value investment [6][7]

Company Performance - Perdoceo Education (PRDO) has returned approximately 24.1% year-to-date, outperforming the Consumer Discretionary sector's average return of 11.8% [4] - The Zacks Consensus Estimate for PRDO's full-year earnings has increased by 1.2% over the past 90 days, indicating improving analyst sentiment [3] Industry Context - Perdoceo Education is part of the Schools industry, which consists of 18 individual stocks and currently ranks 33 in the Zacks Industry Rank, with an average gain of 8% this year [5] - The Consumer Discretionary sector includes 253 individual stocks and holds the 9 position in the Zacks Sector Rank [2] Comparison with Peers - Another notable performer in the Consumer Discretionary sector is Rush Street Interactive, Inc. (RSI), which has achieved a year-to-date return of 58.9% [4] - Rush Street Interactive is categorized under the Gaming industry, which has 39 stocks and is ranked 105, with an industry return of +24.3% since the beginning of the year [6]

Core Insights - The Zacks Schools industry is experiencing a rebound driven by increased demand for career-focused programs in healthcare, skilled trades, cybersecurity, and IT, supported by a labor market that values job-ready skills and government initiatives promoting non-degree pathways [1][2] - Digital innovation is a key differentiator, with institutions investing in adaptive learning tools and scalable online platforms to enhance engagement and support flexible learning for working adults [1][8] - The sector is undergoing consolidation as larger players acquire smaller institutions to broaden offerings and improve scale, with recent legislative changes like "Workforce Pell" expanding market opportunities for accredited programs [6][12] Industry Overview - The Zacks Schools industry includes for-profit education companies offering undergraduate, graduate, and specialized programs in various fields such as finance, healthcare, and technology [3] - The industry is focused on providing career-oriented programs that align with labor market needs, particularly in high-demand areas like nursing and cybersecurity [3][5] Trends Influencing Growth - There is a rising demand for workforce-oriented programs, particularly among adult learners and career switchers, as the labor market increasingly values job-ready skills over traditional degrees [4] - The healthcare sector is facing a significant shortage of skilled professionals, prompting educational institutions to design rigorous programs that meet workforce needs [5] - Digital transformation is driving interest in IT boot camps and tech-aligned certifications, where for-profit providers have established a scalable presence [4] Financial Performance and Market Position - The Zacks Schools industry has lagged the broader Zacks Consumer Discretionary sector but has outperformed the S&P 500 Composite over the past year, with a collective gain of 20.6% [16] - The industry's forward 12-month price-to-earnings ratio is currently at 15.32X, lower than the S&P 500's 22.76X, indicating potential value opportunities [19] Company Highlights - Grand Canyon Education has seen a 10% increase in total online enrollment and a 42.1% stock surge over the past year, with earnings for 2025 expected to grow by 12.8% [25] - Laureate Education's stock has rallied 76.6% over the past year, with a projected earnings growth of 28.2% for 2025 [28] - Stride has experienced a 107.8% stock increase, with fiscal 2026 earnings expected to grow by 5.2% [32] - Lincoln Educational Services has surged 59.5% in stock price, with a projected earnings growth of 19.6% for 2025 [34] - Perdoceo Education's stock has risen 44.7%, with earnings for 2025 expected to grow by 10% [39]

Group 1 - The perception of college degrees is shifting, with them becoming less of a guarantee for prosperity and more associated with debt [1] - Observing megatrends can provide insights into societal advancements and potential investment opportunities [1] - The importance of fundamentals, quality of leadership, and product pipeline is emphasized for identifying investment opportunities [1] Group 2 - The focus has been on marketing and business strategy for medium-sized companies and startups, indicating a trend towards supporting smaller enterprises [1] - Experience in evaluating startups and emerging industries/technologies highlights a commitment to understanding innovative sectors [1]

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Background - The analyst holds certifications as FMVA and FPWMP, which provide skills in financial statement analysis, valuation modeling, and investment portfolio construction [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst graduated with a CGPA of 3.6 in Finance from Alexandria University in 2024, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors, including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].

Group 1 - The article emphasizes a technical focus on fundamental value drivers of business economics to identify high probability long-term compounders [1] - The company aims to buy securities at appropriate prices relative to their intrinsic worth, indicating a value investing strategy [1] - Research covers a wide range of financial markets, including investment securities and futures & options markets, suggesting a comprehensive approach to market analysis [1] Group 2 - The analyst has a beneficial long position in the shares of PRDO, indicating confidence in the company's future performance [2] - The article expresses the analyst's personal opinions and does not involve compensation from any company mentioned, ensuring an independent perspective [2] Group 3 - Seeking Alpha clarifies that past performance is not indicative of future results, highlighting the importance of due diligence for investors [3] - The platform does not provide recommendations or advice on investment suitability, reinforcing the need for individual assessment [3]

Group 1 - Bassett Furniture (BSET) is part of the Consumer Discretionary sector, which includes 255 individual stocks and currently holds a Zacks Sector Rank of 10 [2] - The Zacks Rank system emphasizes earnings estimates and revisions, with Bassett Furniture currently holding a Zacks Rank of 2 (Buy) [3] - The Zacks Consensus Estimate for BSET's full-year earnings has increased by 17.9% in the past quarter, indicating improved analyst sentiment [3] Group 2 - Year-to-date, Bassett Furniture has gained approximately 17%, outperforming the average 6.5% gain of the Consumer Discretionary group [4] - Bassett Furniture is part of the Furniture industry, which consists of 8 companies and currently ranks 214 in the Zacks Industry Rank; this industry has seen a decline of about 18.4% this year [5] - In comparison, Perdoceo Education (PRDO), another Consumer Discretionary stock, has returned 18.2% year-to-date and has a Zacks Rank of 2 (Buy) [4][6]

Core Insights - Investors favor businesses with consistent profitability, measured effectively by net profit margin, which indicates a company's efficiency in converting sales into profits [1][2] - Companies such as Chefs' Warehouse, Perdoceo Education, Adtalem Global Education, and Nomad Foods exhibit strong net profit margins, making them attractive to investors [1][8] Financial Metrics - Net profit margin is calculated as Net Profit/Sales * 100, representing the amount retained after all expenses [2] - A higher net profit margin not only attracts investors but also skilled employees, enhancing overall business value [3] Investment Considerations - A strong net profit margin provides clarity on a company's business model, including pricing, cost structure, and manufacturing efficiency, making it a preferred metric for investors [4] - However, net profit margin varies significantly across industries, and its relevance can diminish for companies that rely heavily on debt financing [5] Screening Criteria - The screening parameters for selecting stocks include a net margin of at least 0%, positive earnings per share (EPS) growth, and a strong broker rating [7] - Stocks like CHEF, PRDO, ATGE, and NOMD were selected based on their strong net margins and favorable EPS growth outlooks, each holding a Zacks Rank of 2 and a VGM Score of A [8] Company Performance - Chefs' Warehouse has seen its 2025 earnings estimate revised upward to $1.75 per share, with a historical average earnings surprise of 11.3% [10] - Perdoceo Education's 2025 earnings estimate increased to $2.52 per share, with an average earnings surprise of 6.2% [12] - Adtalem Global Education maintains a fiscal 2026 earnings estimate of $6.52 per share, with an average earnings surprise of 18.4% [13] - Nomad Foods' 2025 earnings estimate was revised upward to $2.13 per share, with an average earnings surprise of 3.2% [14]

Core Insights - The article compares two companies in the Schools sector, Perdoceo Education (PRDO) and K12 (LRN), to determine which is the better undervalued stock option for investors [1] Valuation Metrics - Perdoceo Education has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while K12 has a Zacks Rank of 3 (Hold) [3] - PRDO's forward P/E ratio is 11.79, significantly lower than LRN's forward P/E of 16.66, suggesting PRDO is more undervalued [5] - The PEG ratio for PRDO is 0.79, compared to LRN's PEG ratio of 0.83, indicating PRDO's expected earnings growth is more favorable [5] - PRDO's P/B ratio is 1.98, while LRN's P/B ratio is 3.97, further supporting PRDO's valuation advantage [6] - Based on these metrics, PRDO holds a Value grade of A, while LRN has a Value grade of C, reinforcing PRDO as the superior value option [6]

Company Performance - Perdoceo Education reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and up from $0.60 per share a year ago, representing an earnings surprise of +3.08% [1] - The company posted revenues of $209.58 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.29%, and an increase from year-ago revenues of $166.74 million [2] - Over the last four quarters, Perdoceo Education has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - Perdoceo Education shares have gained approximately 8.2% since the beginning of the year, matching the S&P 500's gain of 8.2% [3] - The current Zacks Rank for Perdoceo Education is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $206.34 million, and for the current fiscal year, it is $2.49 on revenues of $832.34 million [7] - The outlook for the industry, particularly the Schools sector, is favorable, as it ranks in the top 13% of over 250 Zacks industries, suggesting potential for outperformance [8]