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Adtalem (ATGE) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research
·3 mins read

Adtalem Global Education Inc. ATGE is scheduled to report second-quarter fiscal 2020 results on Feb 4, after the closing bell.

In the last reported quarter, the top and bottom lines lagged the Zacks Consensus Estimate by 15.8% and 26.1%, respectively. In addition, earnings declined 22.7% from the year-ago period due to increased investments in marketing and student recruitment.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has been unchanged at 55 cents per share over the past 60 days. The said figure indicates a 25.7% decrease from the year-ago earnings of 74 cents per share. The consensus mark for revenues is $261.95 million, suggesting 17.3% year-over-year fall.

Adtalem Global Education Inc. Price and EPS Surprise

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

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

Factors at Play

Adtalem’s enrollments, after having declined for several quarters, bounced back in first-quarter fiscal 2020 on the back of successful implementation of strategic initiatives. The trend is most likely to have continued in the fiscal second quarter. During the quarter, the company partnered with corporations, hospitals, government agencies and professional organizations to design education programs aimed at teaching new skills to employees. Also, it launched a number of short-term programs and undertook various cost-saving initiatives.

However, its bottom line has been under pressure due to certain restructuring charges, increased marketing-related expenses and excessive regulations.

The company expects fiscal second-quarter revenue growth to be lower than first-quarter fiscal 2020 due to the absence of ACAMS conference. Also, it expects to generate lower year-over-year earnings due to higher level of marketing spend in the quarter to be reported.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Adtalem this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Earnings ESP: Adtalem has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some stocks in the Consumer Discretionary sector you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases.

Mattel, Inc. MAT has an Earnings ESP of +850.00%, and a Zacks Rank #3.

SeaWorld Entertainment, Inc. SEAS has an Earnings ESP of +104.17%, and a Zacks Rank #3.

Crocs, Inc. CROX has an Earnings ESP of +30.00% and a Zacks Rank #3.

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SeaWorld Entertainment, Inc. (SEAS) : Free Stock Analysis Report
 
Crocs, Inc. (CROX) : Free Stock Analysis Report
 
Mattel, Inc. (MAT) : Free Stock Analysis Report
 
Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
 
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