At US$9.47, Is Lincoln Educational Services Corporation (NASDAQ:LINC) Worth Looking At Closely?
Lincoln Educational Services Corporation (NASDAQ:LINC), might not be a large cap stock, but it saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Lincoln Educational Services’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Lincoln Educational Services
What Is Lincoln Educational Services Worth?
Good news, investors! Lincoln Educational Services is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Lincoln Educational Services’s ratio of 11.45x is below its peer average of 20.74x, which indicates the stock is trading at a lower price compared to the Consumer Services industry. Although, there may be another chance to buy again in the future. This is because Lincoln Educational Services’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Lincoln Educational Services?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Lincoln Educational Services, at least in the near future.
What This Means For You
Are you a shareholder? Although LINC is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to LINC, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on LINC for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So while earnings quality is important, it's equally important to consider the risks facing Lincoln Educational Services at this point in time. For example, we've found that Lincoln Educational Services has 3 warning signs (2 can't be ignored!) that deserve your attention before going any further with your analysis.
If you are no longer interested in Lincoln Educational Services, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
