Dj Mohawk Industries Inc. Stock Falls Thursday, Underperforms Market

Lincoln Educational Services Corporation LINC reported mixed results for third-quarter 2024. Its earnings missed the Zacks Consensus Estimate, but revenues topped the same.

Nonetheless, both metrics increased year over year, driven by a 10.6% increase in the average student population. This uptick resulted from four consecutive quarters of double-digit start growth and the recently opened East Point, GA campus, which generated $3.4 million in revenues in the third quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Shares of this diversified career-oriented post-secondary education provider gained 3.6% on Monday. Investors’ sentiments might have got a boost after the company raised its 2024 guidance.

Strong demand for its programs, impressive graduation and placement rates, new campus development strategy, and improving efficiencies position Lincoln well to achieve its long-term objectives. In 2027, LINC expects to generate approximately $550 million in revenues and $90 million in adjusted EBITDA.

Inside the Headlines

LINC reported adjusted earnings per share (EPS) of 13 cents, which missed the Zacks Consensus Estimate of 14 cents by 7.1% but rose 18.2% from the year-ago quarter.

Lincoln Educational Services Corporation Price, Consensus and EPS Surprise

Lincoln Educational Services Corporation price-consensus-eps-surprise-chart | Lincoln Educational Services Corporation Quote

Total revenues of $114.4 million surpassed the consensus estimate of $111.1 million by 3% and increased 14.8% from the prior year.

Student starts grew 21.1% to 6,243 and quarter-end student population rose 13.3% to 15,887 from the year-ago quarter. Average population was 14,309 compared with 12,942 a year ago.

Selling, general and administrative expense increased 16.3% year over year to $63.3 million, mainly due to costs associated with new programs, new campuses and campus relocations. Also, costs associated with a larger student population and increased marketing investments, which helped drive student starts, were additional headwinds.

Adjusted EBITDA was $10.2 million, up 66.7% year over year.

Segment Details

Campus Operations Segment: The segment’s revenues increased 15% year over year to $114.4 million. Adjusted EBITDA increased 38.6% to $19.9 million from the prior year.

Transitional Segment: In the fourth quarter of 2023, the completed teach-out of its Somerville, MA, campus.

Financial Details

As of Sept. 30, 2024, LINC had total liquidity of $93.96 million, including cash and cash equivalents of $53.96 million.

Cash provided by operating activities was $5.6 million in the third quarter of 2024 versus net cash used in operating activities of $6.8 million in the year-ago period.

2024 Guidance Raised

LINC expects revenues between $430 and $435 million, up from previously guided range of $423-$430. Adjusted EBITDA is now expected to be in the $41-$43 million range, up from $39-$42 million expected earlier. Adjusted net income is likely to be within $16-$18 million compared with $14-$17 million anticipated previously. In 2023, the company reported revenues of $378.1 million, adjusted EBITDA of $26.5 million and adjusted net income of $14.8 million.

The company has also increased the low-end range for capital expenditures to $50-$55 million (earlier it projected $45-$55 million). Student Starts growth is also projected in 13-15% range, up from 9-12% expected earlier.

Zacks Rank

LINC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

Adtalem Global Education Inc. ATGE posted better-than-expected results in first-quarter fiscal 2025. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given strong enrollment growth and strategic initiatives.

ATGE raised its fiscal 2025 guidance, projecting revenues between $1.69 billion and $1.73 billion, reflecting confidence in sustained growth momentum.

Leggett & Platt, Inc. LEG reported lower-than-expected results for the third quarter of 2024. Adjusted earnings and sales missed the Zacks Consensus Estimate and declined year over year.

Legget believes that the weakness in demand will continue into the fourth quarter, based on which it lowered its 2024 sales and EPS guidance.

Mohawk Industries, Inc. MHK reported strong third-quarter 2024 results (ended Sept. 30). Its earnings surpassed the Zacks Consensus Estimate and improved from the prior year despite pricing pressures and a negative mix.

As global conflicts, political uncertainty and inflation are weighing on consumer confidence and discretionary spending around the world, MHK does not see an industry improvement this year. It also expects recent U.S. hurricanes to negatively impact its fourth-quarter sales by $25-$40 million.

Zacks Investment Research

Strategic Education, Inc., or SEI STRA, reported impressive results for third-quarter 2024. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Shares of this education services holding company gained 2.2% on Thursday.

The company witnessed strong employer affiliated enrollment in the U.S. Higher Education (USHE) segment, strong growth from Sophia subscriptions in the Education Technology Services (ETS) segment and another quarter of total enrollment growth in the Australia/New Zealand (ANZ) segment.

Inside the Headlines

SEI reported adjusted earnings per share (EPS) of $1.16, which strongly topped the Zacks Consensus Estimate of 81 cents by 43.2% and rose 19.6% from the year-ago quarter.

Strategic Education Inc. Price, Consensus and EPS Surprise

Strategic Education Inc. price-consensus-eps-surprise-chart | Strategic Education Inc. Quote

Total revenues of $305.96 million surpassed the consensus estimate of $298.69 million by 2.4% and increased 7% from the year-ago period. On a constant-currency basis, revenues increased 6.5% to $304.4 million in the quarter.

Segment Details

USHE: This segment comprises Strayer and Capella Universities. The segment’s revenues increased 2.9% year over year to $207.7 million, backed by solid enrollment.

Student enrollment increased 4.8% from the year-ago quarter’s level to 86,533 students. FlexPath enrollment was 24% of USHE enrollment compared with 22% in a year ago.

During the quarter, the operating margin rose to 5.5% from 5.2%, up 30 basis points (bps) from the year-ago quarter.

ETS: This segment includes Employer Solutions, Workforce Edge and Sophia Learning. The segment’s quarterly revenues were $26.3 million, up 26.2% year over year, backed by solid growth in Sophia Learning subscriptions and employer-affiliated enrollment.

Sophia Learning’s average total subscribers increased 33% from the year-ago period’s levels. Employer-affiliated enrollment was 29.8% of USHE enrollment compared with 27.8% in the year-ago period.

Its operating margin was 41% in the reported quarter, up 10 bps from a year ago.

ANZ: This segment includes Torrens University, Think Education and Media Design School. The segment's revenues were $71.9 million, up 13.7% year over year, driven by higher enrollment and revenue-per-student. On a constant-currency basis, revenues rose 11.3% to $70.4 million year over year.

Student enrollment within ANZ rose 5.1% to 19,205 students during the reported quarter compared with the year-ago quarter.

The operating margin was 20.6%, down 130 bps in the year-ago period. On a constant-currency basis, the operating income margin was 20.7%, down from 21.9% in the year-ago period.

STRA’s Operating Highlights

Adjusted operating income was up 13.8% to $37.1 million from $32.6 million in the year-ago quarter. The adjusted operating margin of 12.1% expanded 70 bps from the year-ago quarter.

Adjusted EBITDA was $56.2 million, up from $49.5 million in the year-ago quarter.

STRA’s Financial Details

As of Sept. 30, 2024, SEI had cash and cash equivalents of $195.89 million, up from $168.5 million in 2023-end. There was no long-term debt at the third-quarter end compared with $61.4 million in 2023-end. During the third quarter, the company repaid the remaining $61.3 million of outstanding debt on its revolving credit facility.

Cash provided by operating activities was $153.4 million in the first nine months of 2024, up from $87.2 million in the comparable year-ago period. In the first nine months, capital expenditures were $29.3 million compared with $27.3 million a year ago.

Zacks Rank

SEI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

Adtalem Global Education Inc. ATGE posted better-than-expected results in first-quarter fiscal 2025. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given strong enrollment growth and strategic initiatives.

ATGE raised its fiscal 2025 guidance, projecting revenues between $1.69 billion and $1.73 billion, reflecting confidence in sustained growth momentum.

Leggett & Platt, Inc. LEG reported lower-than-expected results for the third quarter of 2024. Adjusted earnings and sales missed the Zacks Consensus Estimate and declined year over year.

Legget believes that the weakness in demand will continue into the fourth quarter, based on which it lowered its 2024 sales and EPS guidance.

Mohawk Industries, Inc. MHK reported strong third-quarter 2024 results (ended Sept. 30). Its earnings surpassed the Zacks Consensus Estimate and improved from the prior year despite pricing pressures and a negative mix.

As global conflicts, political uncertainty and inflation are weighing on consumer confidence and discretionary spending around the world, MHK does not see an industry improvement this year. It also expects recent U.S. hurricanes to negatively impact its fourth-quarter sales by $25-$40 million.

Zacks Investment Research