Perdoceo Education's first quarter results drew a strong positive market reaction, underpinned by notable revenue growth and solid operational execution. Management attributed the outperformance to higher student retention and engagement across its core institutions, as well as a marked increase in prospective student interest. CEO Todd Nelson pointed to multi-year highs in student retention and emphasized that the company's marketing and admissions strategies have adapted to capitalize on this momentum. The recent St. Augustine acquisition also contributed to the quarter by boosting both revenue and adjusted operating income.
Is now the time to buy PRDO? Find out in our full research report (it’s free).
Perdoceo Education (PRDO) Q1 CY2025 Highlights:
- Revenue: $213 million vs analyst estimates of $208 million (26.6% year-on-year growth, 2.4% beat)
- Adjusted EPS: $0.70 vs analyst estimates of $0.66 (6.1% beat)
- Adjusted EBITDA: $66.39 million vs analyst estimates of $62.1 million (31.2% margin, 6.9% beat)
- Management raised its full-year Adjusted EPS guidance to $2.48 at the midpoint, a 2.9% increase
- Operating Margin: 24.3%, down from 28.5% in the same quarter last year
- Market Capitalization: $2.1 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Perdoceo Education’s Q1 Earnings Call
- Management was asked about the key drivers behind the enrollment momentum at CTU and the sustainability of recent gains; they cited ongoing investments in student support and marketing.
- Analysts inquired about the integration process of St. Augustine and its impact on financial results; management emphasized accretive contributions and enrollment growth in healthcare programs.
- The effectiveness of increased marketing spend and its return on investment was questioned, with management highlighting targeted campaigns and data-driven strategies.
- Analysts probed on the outlook for corporate student program growth and resource allocation, and management reiterated its commitment to expanding this segment.
- The potential impact of regulatory changes on prospective student demand was discussed, with management expressing optimism due to recent positive trends but remaining vigilant to policy shifts.
Catalysts in Upcoming Quarters
In the coming quarters, our team will monitor (1) the pace of enrollment growth at CTU and AIUS, (2) the integration and expansion of St. Augustine’s programs and campuses, and (3) the effectiveness of increased marketing and technology investments on student outcomes and cost structure. We will also watch for regulatory developments that could affect student recruitment and compliance spending.
Perdoceo Education currently trades at $32.07, up from $25.16 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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