Core Viewpoint - Investors are seeking growth stocks that can deliver above-average growth and exceptional returns, but identifying such stocks is challenging due to their inherent risks and volatility [1] Company Summary - Universal Technical Institute (UTI) is highlighted as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 43.1%, with projected EPS growth of 34% this year, surpassing the industry average of 23.8% [4] - UTI's year-over-year cash flow growth stands at 60.3%, significantly higher than the industry average of 3.2% [5] - The annualized cash flow growth rate over the past 3-5 years is 63.3%, compared to the industry average of 7.4% [6] - There have been upward revisions in current-year earnings estimates for UTI, with the Zacks Consensus Estimate increasing by 0.5% over the past month [8] - UTI has achieved a Growth Score of A and a Zacks Rank of 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [9][10]

Core Viewpoint - Patterson-UTI Energy, Inc. (PTEN) is expected to report a first-quarter earnings loss of 4 cents per share and revenues of $1.19 billion, reflecting a challenging market environment and operational performance issues [1][8]. Group 1: Recent Performance - In the last reported quarter, PTEN's earnings missed the consensus estimate by 2 cents, reporting an adjusted net loss of 12 cents per share, which was wider than the expected 10-cent loss [2]. - Revenues for the last quarter were $1.2 billion, missing the Zacks Consensus Estimate by 4.2% [2]. - PTEN has beaten the Zacks Consensus Estimate in one of the last four quarters, with an average negative surprise of 37.27% [3]. Group 2: Earnings Estimates - The Zacks Consensus Estimate for first-quarter 2025 earnings indicates a 126.67% year-over-year decline, while revenues are expected to decrease by 21.25% from the previous year [3]. - The estimated operating costs for the first quarter are projected to be $1,207.5 million, down 15.2% from the same period last year [5]. Group 3: Cost Management and Strategy - PTEN's direct operating costs are expected to decrease from $1,077.1 million to $897.6 million, and depreciation, depletion, amortization, and impairment costs are anticipated to drop from $275 million to $234.7 million [6]. - The company's strategy to integrate its Drilling and Completions businesses is expected to create a sustainable competitive advantage, with advancements in natural gas-powered completion equipment enhancing its market position [7]. Group 4: Revenue Challenges - Revenues are anticipated to decline due to poor performance across several segments, including Completion Services and Drilling Services [8][9]. - Despite expected revenue declines, PTEN's cost management efforts are crucial in minimizing the financial impact in the upcoming quarter [9]. Group 5: Earnings Prediction - The model predicts an earnings beat for PTEN, supported by a positive Earnings ESP of +25.00% and a Zacks Rank of 3 [11].

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, aiding investors in selecting stocks likely to outperform the market in the next 30 days [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Style Score assesses a company's financial health and future outlook based on projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Style Score identifies optimal times to invest based on price trends and earnings estimate changes [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to simplify portfolio building [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [10] - Stocks with lower ranks, even if they have high Style Scores, may still face declining earnings forecasts, increasing the risk of price drops [11] Company Spotlight: Universal Technical Institute (UTI) - Universal Technical Institute is a leading provider of post-secondary education in the U.S., offering various programs in automotive and related fields [12] - UTI holds a Zacks Rank of 3 (Hold) with a VGM Score of A and a Momentum Style Score of B, indicating potential for growth [12][13] - Recent upward revisions in earnings estimates and a strong earnings surprise average of 39.4% make UTI a noteworthy consideration for investors [13]

Core Insights - Universal Technical Institute, Inc. has appointed Bruce Schuman as Chief Financial Officer, effective immediately, bringing extensive financial leadership experience to the role [1][2][3] - The company is poised for significant growth and profitability over the next four years, driven by the demand for skilled workers in the U.S. [2][4] - The second phase of the company's North Star strategy aims for approximately 10% revenue CAGR and an expansion of Adjusted EBITDA margin to nearly 20% by fiscal 2029 [4] Company Overview - Universal Technical Institute, Inc. is a leading workforce education provider specializing in transportation, skilled trades, and healthcare education [6] - The company operates two divisions: UTI, which offers technical training programs across 15 campuses in nine states, and Concorde Career Colleges, which has 17 campuses in eight states and online programs [6] Recent Performance - The company reported strong financial results for the first quarter of fiscal 2025, with improvements in revenue, Adjusted EBITDA, and new student starts year-over-year [5] - Universal Technical Institute has increased its guidance ranges for the fiscal year, indicating positive momentum in its operations [5]

Core Points - TOPDON US has entered a five-year partnership with Universal Technical Institute (UTI) to support Electric Vehicle (EV) maintenance and repair training programs [1][2] - The partnership will initially focus on UTI campuses in Rancho Cucamonga, Sacramento, and Long Beach, providing advanced diagnostic tools such as the Phoenix Max and Tornado120000 [2][3] - UTI is recognized as a leading provider of transportation and skilled trades education, with a commitment to preparing students for careers in the evolving EV market [3][4] Company Overview - TOPDON US, founded in 2017, specializes in advanced tools and solutions for automotive professionals, boasting over 250 engineers and more than 500 patents globally [5] - Universal Technical Institute, established in 1965, operates 15 campuses across nine states, offering a variety of technical training programs in transportation and skilled trades [5]

Core Viewpoint - Patterson-UTI is an oil and gas services company that specializes in drilling and completing oil and natural gas wells, also providing specialized drilling components [1] Group 1: Company Overview - Patterson-UTI operates in the oil and gas services sector, focusing on drilling and completion of wells [1] - The company offers specialized drilling components, including drill heads and downhole tools through its Ulterra division [1] Group 2: Analyst Background - The author of the article is a Licensed Professional Engineer with expertise in the Nuclear Power industry, utilizing knowledge of the power and energy sectors for equity evaluation [1] - The author invests in income-producing equities and rental real estate for cash flow and long-term appreciation [1]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Universal Technical Institute (UTI) identified as a strong candidate due to its favorable growth metrics and Zacks Rank [2][11]. Earnings Growth - UTI has a historical EPS growth rate of 39%, with projected EPS growth of 32% for the current year, surpassing the industry average of 24.2% [5]. Cash Flow Growth - UTI's year-over-year cash flow growth stands at 60.3%, significantly higher than the industry average of -15.4%. The company's annualized cash flow growth rate over the past 3-5 years is 63.3%, compared to the industry average of 7.5% [6][7]. Earnings Estimate Revisions - There have been upward revisions in current-year earnings estimates for UTI, with the Zacks Consensus Estimate increasing by 2.8% over the past month [9]. Overall Assessment - UTI has achieved a Zacks Rank of 1 (Strong Buy) and a Growth Score of A, indicating its potential as an outperformer and a solid choice for growth investors [11].

Core Viewpoint - Universal Technical Institute (UTI) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4]. Earnings Estimates and Stock Ratings - The Zacks rating system focuses on changes in earnings estimates, which are crucial for assessing a company's future performance and stock price movements [2][5]. - The Zacks Consensus Estimate for UTI has increased by 8.2% over the past three months, with projected earnings of $0.99 per share for the fiscal year ending September 2025, reflecting a year-over-year growth of 32% [9]. Impact of Institutional Investors - Changes in earnings estimates are closely correlated with stock price movements, largely due to institutional investors who adjust their valuations based on these estimates [5][6]. - An increase in earnings estimates typically leads to higher fair value calculations, prompting institutional buying, which drives stock prices up [5]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - UTI's upgrade to Zacks Rank 1 places it in the top 5% of stocks covered by Zacks, indicating strong potential for market-beating returns in the near term [10][11].

Financial Performance - Revenues for the three months ended December 31, 2024, increased to $201,429,000, up from $174,695,000 in the same period of 2023, representing a growth of 15.3%[18] - Net income for the same period was $22,153,000, compared to $10,389,000 in 2023, reflecting a significant increase of 113.4%[18] - Basic earnings per share rose to $0.41, up from $0.18 in the prior year, indicating a growth of 127.8%[18] - The company reported a comprehensive income of $22,698,000 for the three months ended December 31, 2024, compared to $9,503,000 in 2023, representing a growth of 138.5%[21] - Net income for the three months ended December 31, 2024, was $22,153,000, compared to $10,389,000 for the same period in 2023, representing a 113.4% increase[26] - Operating cash flow for the three months ended December 31, 2024, was $22,962,000, up from $10,836,000 in 2023, indicating a 112.5% increase[26] - EBITDA for the three months ended December 31, 2024, was $35.4 million, significantly higher than $21.4 million for the same period in 2023, indicating improved operational performance[139] - Income available for distribution increased to $22.2 million for the three months ended December 31, 2024, compared to $9.3 million in the prior year, reflecting stronger financial results[134] Assets and Liabilities - Total current assets increased to $230,873,000 as of December 31, 2024, compared to $221,951,000 at the end of September 2024, marking a rise of 4.2%[16] - Total assets reached $753,756,000, up from $744,575,000, which is an increase of 1.6%[16] - Total liabilities decreased to $473,780,000 from $484,344,000, showing a reduction of 2.3%[16] - Total shareholders' equity as of December 31, 2024, was $279,976,000, up from $260,231,000 as of September 30, 2024, reflecting a 7.6% increase[23] - Total debt as of December 31, 2024 was $120,425,000, a decrease from $126,087,000 as of September 30, 2024[60] - As of December 31, 2024, total lease liabilities amounted to $170,643,000, a decrease from $173,809,000 as of September 30, 2024[56] Cash Flow and Financing Activities - Total cash and cash equivalents at the end of the period increased to $171,999,000 from $143,590,000 year-over-year, reflecting a 19.8% growth[26] - Cash used in financing activities decreased to $9,335,000 in Q4 2024 from $15,089,000 in Q4 2023, a reduction of 38.1%[26] - The company made payments of $5,000,000 on the Credit Facility during the three months ended December 31, 2024, leaving remaining availability of $74,000,000[64] - Net cash provided by operating activities for the three months ended December 31, 2024, was $23.0 million, compared to $10.8 million for the same period in 2023[150] - Cash used in investing activities during the three months ended December 31, 2024, was $3.3 million for the purchase of property and equipment[153] Student Enrollment and Revenue Sources - Total new student starts for UTI increased by 19.0% to 2,753, while Concorde saw a 26.0% increase to 2,560, resulting in a consolidated total new student starts increase of 22.3% to 5,313[103] - The primary revenue source for the company is student tuition and fees, with a significant reliance on federal financial aid programs, including Title IV Programs[33] - The company recognized tuition and fee revenue ratably over the term of the courses, with supplemental revenues from textbook sales and dealer technician training services[43][44] Operational Efficiency - The company's operating expenses as a percentage of revenues decreased from 91.9% in 2023 to 86.3% in 2024, indicating improved operational efficiency[113] - Selling, general and administrative expenses rose to $73.8 million for the three months ended December 31, 2024, compared to $68.1 million in the prior year, primarily due to costs associated with business strategies[122] - Compensation and related costs for UTI increased by $4.0 million due to hiring to support new programs and overall student growth[119] - Concorde's compensation and related costs increased by $4.4 million, driven by hiring to support student growth and new program launches[121] Future Plans and Developments - The company plans to launch new HVACR programs at its Sacramento and Orlando campuses, with the first cohort expected to start in Q2 2025[111] - UTI announced the expansion of its Manufacturer Specific Advanced Training program to include Tesla's START Collision Repair program, set to begin in Spring 2025[111] - The company signed a new lease for a co-branded campus with Heartland Dental in Fort Myers, Florida, expected to open in early fiscal 2026[111] Compliance and Accounting - The company is currently evaluating the impact of new accounting standards, including ASU 2023-07 and ASU 2023-09, which will affect financial statement disclosures in fiscal years 2025 and 2026, respectively[38][39] - The company’s financial statements are prepared in accordance with GAAP, and estimates and assumptions are made that could affect reported amounts[35] - The company was in compliance with all debt covenants as of December 31, 2024[67]

Core Insights - Patterson-UTI Energy, Inc. (PTEN) reported a fourth-quarter 2024 adjusted net loss of 12 cents per share, wider than the Zacks Consensus Estimate of a 10-cent loss, and a decline from the previous year's profit of 19 cents per share [1] - Total revenues for the quarter were $1.2 billion, missing the Zacks Consensus Estimate by 4.2% and decreasing 26.6% year over year, attributed to lower revenue contributions from its segments [2] Financial Performance - Adjusted EBITDA for the quarter was $225 million, excluding certain charges [3] - The company declared a quarterly dividend of 8 cents per share, unchanged from the previous quarter, to be paid on March 20 [3] - PTEN returned $52 million to shareholders in the fourth quarter and $417 million for the full year, with $20 million used for share repurchases in the fourth quarter [4] Segment Performance - **Drilling Services**: Revenues totaled $408 million, down 12% from $463.6 million in the prior year, but exceeded estimates of $364.4 million. Operating income was $73 million, down from $92.7 million [5] - **Completion Services**: Revenues dropped 35.8% to $651 million from $1,014.4 million year over year, missing estimates of $736.5 million. The segment reported an operating loss of $50.2 million compared to a profit of $70.3 million in the previous year [6] - **Drilling Products**: Revenues were $86.5 million, a decline of 1.8% from $88.1 million year over year, missing estimates of $89.4 million. Operating profit was $0.3 million, down 23% from the previous year [7] - **Other Services**: Revenues were $16.4 million, down 10.4% from $18.3 million year over year, but exceeded estimates of $15.1 million. Operating income was $2.1 million, up from $1 million in the previous year [8] Capital Expenditure & Financial Position - PTEN spent $140.4 million on capital programs in the reported quarter, down from $205.3 million in the prior year [9] - As of December 31, 2024, the company had cash and cash equivalents of $241 million and long-term debt of $1,219 million, with a debt-to-capitalization ratio of 26% [9] - The company generated $1.2 billion in cash from operations and $525 million in free cash flow [10] Outlook - The company anticipates a strong start in its Drilling Services segment, with an average of 106 rigs operating in the first quarter and an expected adjusted gross profit per operating day of approximately $15,250 [11] - In the Completion Services segment, a seasonal boost in activity is expected, with adjusted gross profit anticipated to reach about $100 million in the first quarter [12] - For the Drilling Products segment, flat adjusted gross profit is forecasted for the first quarter, with optimism for increased international revenues in 2025 [13] - Selling, general and administrative costs are expected to be around $67 million for the first quarter, with depreciation and amortization expenses estimated at $235 million [14] - For 2025, capital expenditures are anticipated to total roughly $600 million, with lower expenditures planned across each segment compared to 2024 [14]