What Happened?
Shares of education company Lincoln Educational (NASDAQ:LINC) jumped 12.6% in the afternoon session after the company reported impressive fourth-quarter results, with revenue and adjusted EBITDA surpassing analysts' expectations, while EPS came in below forecasts. Sales grew 16.4% year on year, driven by a 13.7% increase in student enrollment and tuition hikes, alongside contributions from the newly opened East Point, Georgia campus. Looking ahead, the company provided bullish full-year guidance as revenue and EBITDA surpassed consensus estimates, supported by new campus openings and program expansions. Overall, this was a strong quarter, marked by healthy sales growth and margin expansion, even as EPS fell short.
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What The Market Is Telling Us
Lincoln Educational’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Lincoln Educational and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 12.1% on the news that the company reported a "beat and raise quarter." Lincoln Educational blew past analysts' revenue, operating margin, and EPS expectations this quarter. These beats were driven by more new students than anticipated, and management noted it's seeing stronger demand as the "American public is increasingly questioning the costs and value of a traditional four-year college degree". Given the favorable conditions, management raised its revenue, EBITDA, and adjusted EPS estimates, which beat Wall Street's estimates. Zooming out, we think this was a great quarter that shareholders will appreciate.
Lincoln Educational is up 18.1% since the beginning of the year, and at $18.03 per share, has set a new 52-week high. Investors who bought $1,000 worth of Lincoln Educational’s shares 5 years ago would now be looking at an investment worth $6,908.
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