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Lincoln Gains 33% in 3 Months: Here's What's Driving the Stock
LINCLincoln Educational Services(LINC) ZACKS·2024-12-30 16:17

Core Viewpoint - Lincoln Educational Services Corporation (LINC) has shown significant growth, with a 32.7% increase in stock price over the past three months, outperforming the Zacks Schools industry, the Zacks Consumer Discretionary sector, and the S&P 500 Index [1]. Financial Performance - The Zacks Consensus Estimate for LINC's 2025 earnings per share (EPS) has increased from 68 cents to 69 cents, indicating a year-over-year growth of 27.8%. The 2024 earnings estimates suggest a growth of 10.2% from the previous year. The company has exceeded earnings expectations in three of the last four quarters, with an average surprise of 226.8% [3]. - In the first nine months of 2024, LINC's revenues grew by 16.4% year-over-year to 320.7million,whileadjustedEBITDAreached320.7 million, while adjusted EBITDA reached 23.1 million, up from 10.8millionreportedayearago[16].GrowthDrivers−Thehybridteachingplatform,Lincoln10.0,isattractinginterestduetoitsflexibility,allowingstudentstobalanceworkandlifewhilepursuingtheireducation.ThefirstphaseofthisplatformwascompletedinQ32024,withplanstoimplementitinnursingprograms[5].−LINCisengaginginaccretivecorporatepartnerships,suchasnewtrainingprogramswithHyundaiandGenesis,aimedatenhancingstudents′skillsrelevanttotheautomotiveindustry.ThecompanyisalsoopeningitsthirdTeslatrainingcenter[6].−Long−termgrowthtargetssetfor2027includerevenuegrowthto10.8 million reported a year ago [16]. Growth Drivers - The hybrid teaching platform, Lincoln 10.0, is attracting interest due to its flexibility, allowing students to balance work and life while pursuing their education. The first phase of this platform was completed in Q3 2024, with plans to implement it in nursing programs [5]. - LINC is engaging in accretive corporate partnerships, such as new training programs with Hyundai and Genesis, aimed at enhancing students' skills relevant to the automotive industry. The company is also opening its third Tesla training center [6]. - Long-term growth targets set for 2027 include revenue growth to 550 million, adjusted EBITDA of 90millionwithamarginof1690 million with a margin of 16%, EPS of 1.35, net income of approximately 43million,andcashfromoperationsofabout43 million, and cash from operations of about 65 million [7]. Student Engagement and Partnerships - The Lincoln 10.0 platform is expected to serve approximately 65% of students by the end of 2024, with plans to transition nursing programs by mid-2026, potentially reaching 80% of the student population [14]. - A five-year workforce development agreement with Container Maintenance Corporation is projected to generate around $6 million in revenue, highlighting the company's focus on corporate partnerships to drive student enrollment and revenue growth [15]. - In the first nine months of 2024, student starts increased by 16.6% year-over-year to 15,163, with the total student population rising by 13.3% [14].