Five education stocks to watch in Q2: LRN, VRTU, UTI, LEAI & LAUR

Highlights 

• Stride, Inc. (NYSE:LRN) offers alternative programs to traditional on-campus schooling. It has a P/E ratio of 17.11. 
• Vitru Limited (NASDAQ:VTRU) is a digital education provider. It has a P/E ratio of 27.92. 
• Universal Technical Institute Inc (NYSE:UTI) provides undergraduate degree and certificate programs. It has a P/E ratio of 14.32. 

Education companies are those involved in imparting knowledge through direct or online learning modes with their core focus of education. These companies operate in-person campuses, like schools and colleges, and host training, seminars, etc. 

Some companies from this sector even provide a hybrid or a blend of physical and online learning services. However, this sector is not considered a primary growth investment but can be included for diversification in the portfolio. 

Here, we discuss five education stocks that stayed in the green territory over the past year.

Stride, Inc. (NYSE:LRN)

Closing price on May 11, 2022: US$35.6
Price range in last 52 weeks: US$41.20 to US$25.55

Herndon, Virginia-based Stride Inc. is an online educational company. It offers alternative programs to traditional on-campus schooling and operates virtual charter schools in the US. Its lines of business include Managed Public-School Programs, Private Pay Schools, and Institutional, among others.

For the third fiscal quarter ended March 31, 2022, its revenue was US$421.7 million compared to US$392.1 million in the same quarter a year ago. The rise was driven by higher enrollment, continued growth in adult learning, and an increase in per enrollment revenue.

The net income came in at US$42.9 million or US$1.02 per share diluted compared to US$23.8 million or US$0.57 per share diluted in the March quarter of 2021.

The stock has a market capitalization of US$1.55 billion, a P/E ratio of 17.11, and a forward P/E ratio for one year of 14.07. The LRN stock grew 33.58% in one year.

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Vitru Limited (NASDAQ:VTRU)

Closing price on May 11, 2022: US$14.8
Price range in last 52 weeks: US$18.48 to US$11.30

Vitru Ltd is a digital education provider based in Florianopolis, Brazil. The company provides post-secondary distance learning programs. Its pedagogical ecosystem is focused on a hybrid digital education experience for undergraduates and continuing education. It provides programs through videos, eBooks, podcasts, and HTML text, among others.

It will report its first-quarter results of the current fiscal year on May 16.

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For the fiscal year ended December 31, 2021, it posted a revenue of R$631.1 million (US$122,9 million) compared to R$519.2 million (US$101.11 million) in the previous fiscal. The net income was R$70.7 million (US$13.8 million) versus R$19.1 million (US$3.71 million) in fiscal 2020.

The stock has a market capitalization of US$345 million. It has a P/E ratio of 27.92, and the forward P/E ratio for one year is 2.35. VTRU stock price increased by 23.33% in one year.

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Universal Technical Institute Inc (NYSE:UTI)

Closing price on May 11, 2022: US$8.16
Price range in last 52 weeks: US$11.45 to US$5.34

Universal Technical Institute Inc. is an educational institution based in Phoenix, Arizona. The company provides undergraduate degree and certificate programs for technicians in various domains, such as automotive, motorcycle, diesel, collision repair, and marine fields. 

The company earned a revenue of US$102.1 million in the second quarter of 2022, up 31.4% YoY, compared to the same quarter in the previous year. Its net income was US$7.4 million, or US$0.11 per share diluted against a net loss of US$2.86 million or US$0.09 per share diluted in Q2, 2021. 

The stock has a market capitalization of US$279.2 million, a P/E ratio of 14.32, and a forward P/E ratio for one year of 22.05. The stock rose 39.97% in one year.

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Laureate Education, Inc. (NASDAQ:LAUR)

Closing price on May 11, 2022: US$11.29
Price range in last 52 weeks: US$19.02 to US$9.41

Miami, Florida-based Laureate Education Inc. is an international community of universities. The company provides a range of undergraduate and graduate degrees through campus-based, online, and hybrid programs to students through licensed universities and higher education institutions. Its two geographical segments are Mexico and Peru. 

For the quarter ended March 31, 2022, its revenue was US$209.6 million compared to US$194.7 million in 2020. The net loss was US$44.68 million or US$0.25 per share diluted compared to a net loss of US$164.9 million or US$0.82 per share diluted in the March quarter of the previous fiscal year. 

The stock has a market capitalization of US$1.96 billion. Its P/E ratio is 6.73, and the forward P/E ratio for one year is 18.51. The stock gave a 38.9% return in one year, as per TR data.

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Legacy Education Alliance Inc (OTC:LEAI)

Closing price on May 11, 2022: US$0.175
Price range in last 52 weeks: US$0.06 to US$0.09

Cape Coral, Florida-based Legacy Education Alliance Inc. provides educational training, seminars, conferences, and services. 

The training includes comprehensive instruction and mentorship in entrepreneurship, personal finance, real estate investing strategies, and techniques. Its geographical segments are North America, the UK, and other foreign markets.

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For the fiscal year ended December 31, 2021, its revenue was US$7.71 million compared to US$25.91 million in the previous fiscal. The company booked a net loss of US$0.57 million or US$0.03 per share diluted compared to the net income of US$16.01 million or US$0.68 per share diluted in fiscal 2020.

The stock has a market capitalization of US$5.94 million. Its stock generated a 75% return in one year.

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Bottom line:

The education sector saw massive disruptions during the pandemic. The closure of schools and other educational campuses impacted learners worldwide. But with the reopening of schools, life and learning are coming back to normal. However, investors should carefully analyze the fundamentals of stocks before investing in them.