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Adtalem (ATGE) Q4 Earnings Meet, Stock Up on Solid Enrollment

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  • ATGE

Adtalem Global Education Inc.’s ATGE shares rise 6.4% in the after-hours trading session on Aug 19, after fourth-quarter fiscal 2021 earnings met the Zacks Consensus Estimate. Impressively, its earnings increased on a year-over-year basis driven by strong revenues and operating leverage across the business. Although the top line missed the consensus mark, it grew on a year-over-year basis.

Lisa Wardell, chairman and CEO of Adtalem said, “Our strong fourth quarter performance and the completion of the Walden acquisition further position us as a leading healthcare education provider with market-leading scale and breadth. We took advantage of strong demand for our programs and offerings in the quarter, and we look forward to demonstrating the significant value Walden will bring to our students, employer partners and shareholders.”

Earnings & Revenues Discussion

Adjusted earnings of 70 cents per share met the consensus mark and increased 20.7% year over year.

Adtalem Global Education Inc. Price, Consensus and EPS Surprise

Adtalem Global Education Inc. Price, Consensus and EPS Surprise
Adtalem Global Education Inc. Price, Consensus and EPS Surprise

Adtalem Global Education Inc. price-consensus-eps-surprise-chart | Adtalem Global Education Inc. Quote

Revenues for the quarter totaled $280.4 million, lagging the consensus mark of $285 million by 1.3% but increasing 7.9% year over year driven by growth across segments. For the fiscal fourth quarter, enrollment of new and total students grew 4.6% and 3.8% year over year, respectively.

Adjusted operating income of $46.9 million decreased 17.1% year over year.

Segment Details

Medical and Healthcare: Revenues in the segment increased 5.7% from the year-ago figure to $223.5 million backed by strong demand. In Chamberlain, revenues grew 5.3% year over year, driven by persistent increase in new and total enrollments. New student enrollment for the May session increased 3.6% and total student enrollment rose 4.6% from the prior-year level.

Medical and Veterinary schools’ revenues increased 6.3% year over year driven by an increase in new enrollment. Enrollment of new students grew 12.3%, while that of total students fell 1.2% year over year. Segment’s operating income was $41.3 million, up 3.4% from the prior-year level driven by higher revenues, partially offset by increased costs in preparation for more employees returning to campus.

Financial Services: Revenues in the segment totaled $56.9 million, which increased 17.8% year over year driven by a rise in revenues at ACAMS, OnCourse Learning and Becker. ACAMS revenues rose as non-conference certification offerings continue to perform well and conference revenues tend to recover. OnCourse Learning’s persistent focus on execution in a favorable mortgage market and strength in the education business drove revenues for the quarter. Becker’s revenue growth stemmed from persistent growth in ongoing education program offerings and an increase in CPA exam preparation revenues.

Operating income rose 29.8% from the prior-year quarter to $11 million due to higher revenues, partially offset by increased sales and marketing expenses to support growth.

Liquidity & Cash Flow

As of Jun 30, 2021, Adtalem had cash and cash equivalents of $494.6 million compared with $500.5 million at fiscal 2020-end. In fiscal 2021, cash provided by operating activities totaled $192.2 million compared with $107.7 million in the year-ago period.

Fiscal 2021 Highlights

For fiscal 2021, the company reported adjusted earnings of $2.98 per share, up 30.7% year over year. Revenues were up 5.7% from a year ago to $1,112.4 million. Adjusted operating income was also up 22.1% year over year.

Guidance

For fiscal 2022, Adtalem expects revenues within $1,685-$1,735 million and adjusted earnings per share in the $4.20-$4.45 band. The Zacks Consensus Estimate for fiscal 2022 revenues is pegged at $1.19 billion and that of adjusted earnings is $3.35 per share.

Zacks Rank

Adtalem — which shares space with American Public Education, Inc. APEI, Strategic Education, Inc. STRA and Lincoln Educational Services Corporation LINC in the Zacks Schools industry — currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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