Company Performance - Adtalem Global Education (ATGE) has returned approximately 32% year-to-date, significantly outperforming the average gain of 5.8% in the Consumer Discretionary sector [4] - The Zacks Consensus Estimate for ATGE's full-year earnings has increased by 5.1% over the past three months, indicating improved analyst sentiment and earnings outlook [4] - Adtalem Global Education is ranked 2 (Buy) in the Zacks Rank, suggesting strong potential for future performance [3] Industry Comparison - Adtalem Global Education is part of the Schools industry, which ranks 17 in the Zacks Industry Rank, with an average gain of 6% this year, indicating that ATGE is performing better than its industry peers [6] - In contrast, Fox (FOXA), another Consumer Discretionary stock, has returned 10.8% year-to-date and is part of the Broadcast Radio and Television industry, which ranks 78 and has gained 25.5% this year [5][6] - The Consumer Discretionary sector as a whole is ranked 12 among 16 different sector groups in the Zacks Sector Rank [2]

Summary of Adtalem Global Education Conference Call Company Overview - **Company**: Adtalem Global Education - **Industry**: Post-secondary education, specifically healthcare-focused institutions - **Current Enrollment**: Approximately 92,000 to 94,000 students across five institutions, with 92% of programs in healthcare [1][5] Core Business and Strategy - **Mission**: Expand access to high-quality clinical careers for historically overlooked students and address critical workforce shortages in healthcare [4] - **Institutions**: - Chamberlain University: Largest nursing school in the U.S. with over 40,000 students [5] - Walden University: Fully online university with nearly 50,000 students, third largest nursing school [6] - Medical and Veterinary Schools: Two medical schools and one veterinary school serving about 4,500 students [6][7] - **Strategic Focus**: Operational excellence through a three-year strategy termed "growth with purpose," focusing on marketing, enrollment, retention, pricing, and programs [8][10] Financial Performance - **Enrollment Growth**: Total enrollment has grown sequentially for nine straight quarters [9] - **Revenue and Profitability**: Revenue growth has been primarily organic, with profitability improving significantly over the years [11] - **Earnings Per Share**: Attractive growth in earnings per share due to improved profitability and effective balance sheet management [11] Key Metrics and Achievements - **Leading Grantor**: Number one grantor of nursing and MD degrees in the U.S. [12] - **Alumni Success**: Strong employability and low cohort default rates, reflecting the quality of education and job placement [14] - **Diversity**: Largest producer of Black and Latino physicians in the U.S. [19] Market Environment - **Demand Trends**: Normalized demand environment post-COVID, with a growing competitive landscape in healthcare education [21][22] - **Competitive Moat**: Strong brand equity, clinical relationships, and regulatory approvals allow for uncapped student enrollment across states [23] Institutional Branding - **Chamberlain vs. Walden**: Distinct branding strategies allow for capturing different market segments; Chamberlain focuses on pre-licensure nursing while Walden targets post-licensure [24][26] Pricing Strategy - **Pricing Philosophy**: Chamberlain is positioned as a premium brand, while Walden operates as a more affordable option, allowing for a diverse enrollment mix [26][27] - **Price Optimization**: Adjustments made to pricing based on market conditions and enrollment trends [28][29] Future Growth and Sustainability - **Growth Drivers**: Focus on student success, maximizing existing capacity, and introducing new programs in new geographies [35][36] - **Operating Leverage**: Ability to grow revenues without proportional increases in expenses, targeting 100 basis points of margin improvement annually [38][39] Regulatory Environment - **Current Landscape**: Favorable regulatory conditions for proprietary higher education, with potential positive changes in legislation that could benefit Adtalem [47][50] - **Concerns**: Proposed cuts to education funding and loan programs, but the company believes it can manage these challenges through alternative financing options [51][53] Conclusion - **Outlook**: The company is optimistic about sustaining growth and profitability, with plans for future investor updates and projections [44][45]

Core Viewpoint - Investors are evaluating the value opportunities presented by Adtalem Global Education (ATGE) and Universal Technical Institute (UTI) in the current market [1] Group 1: Zacks Rank and Value Scores - Both ATGE and UTI currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] - The Zacks Rank is a strategy that targets companies with favorable earnings estimate trends, while the Style Scores assess companies based on specific traits [2] Group 2: Valuation Metrics - ATGE has a forward P/E ratio of 19.90, while UTI has a higher forward P/E of 33.82 [5] - ATGE's PEG ratio is 1.33, which is more favorable compared to UTI's PEG ratio of 2.25, indicating better expected EPS growth relative to its valuation [5] - ATGE's P/B ratio stands at 3.37, significantly lower than UTI's P/B of 6.62, suggesting ATGE is more undervalued based on its book value [6] Group 3: Overall Value Assessment - Based on various valuation metrics, ATGE is assigned a Value grade of B, while UTI receives a Value grade of C, indicating that ATGE is currently the superior value option [6]

Core Viewpoint - Adtalem Global Education Inc. (ATGE) has demonstrated strong stock performance with a year-to-date increase of 42.6%, significantly outperforming the Zacks Schools industry and the broader market indices [1][2]. Financial Performance - The Zacks Consensus Estimate for fiscal 2025 earnings per share has increased to $6.42 from $6.20 over the past 60 days, indicating a growth of 28.1% compared to the previous year [3]. - For fiscal 2025, Adtalem expects revenues to be between $1,760 million and $1,775 million, an increase from the prior estimate of $1,730 million to $1,760 million. Adjusted EPS is projected to be in the range of $6.40 to $6.60, up from $6.10 to $6.30 [10]. Growth Drivers - The company is experiencing solid enrollment growth, with total student enrollment rising 9.8% year over year to 94,223 students, marking the 12th consecutive quarter of growth [8]. - Adtalem's Growth with Purpose strategy emphasizes sustainable progress and strategic execution, which is expected to enhance performance and long-term value creation [9]. - The company has partnered with Hippocratic AI, Inc. to develop a curriculum for training clinicians in AI healthcare applications, showcasing its focus on innovation and collaboration [7]. Market Position and Demand - Adtalem is addressing the nationwide shortage of healthcare professionals by aligning its programs with evolving workforce demands, particularly in nursing and healthcare education [11]. - The Practice Ready Specialty Focused program has enrolled over 4,000 students, with 900 completing specialty rotations, indicating a strong commitment to reshaping nursing education [12]. Challenges - The company faces margin pressure in the Medical and Veterinary segment and increased expenses, with the cost of educational services rising 10.9% year over year to $572.5 million [2][13].

Company Overview - Adtalem Global Education Inc. is a leading healthcare education provider and workforce solutions innovator, offering a wide array of programs across medical and healthcare services [12]. Zacks Rank and Style Scores - Adtalem has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [12]. - The company has a Momentum Style Score of A, with shares increasing by 26% over the past four weeks [13]. - One analyst has revised their earnings estimate upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.12 to $6.32 per share [13]. - Adtalem boasts an average earnings surprise of 18.4%, highlighting its potential for positive performance [13]. Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Adtalem should be on investors' short list for potential investment opportunities [13].

Core Insights - Adtalem Global Education Inc. (ATGE) reported strong third-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding expectations and showing year-over-year growth [1][3] - The company's performance was driven by increased enrollment and higher tuition rates across all reportable segments, supported by strategic investments to enhance student experience [1][2] Earnings & Revenue Discussion - Adjusted earnings per share (EPS) reached $1.92, surpassing the Zacks Consensus Estimate of $1.63 by 17.8%, and increased from $1.50 in the prior year [3] - Revenues totaled $466.1 million, exceeding the consensus mark of $444 million by 4.9% and growing 12.9% year over year [3] - Total student enrollment rose 9.8% year over year to 94,223 students, compared to a predicted enrollment of 88,056 [3] Operating Performance - Adjusted operating income increased 17.4% year over year to $105.4 million, with an adjusted operating margin expanding 80 basis points to 22.6% [4] - Adjusted EBITDA was $127.8 million, up 19.3% from the prior year, with an adjusted EBITDA margin expanding 150 basis points to 27.4% [4] Segment Performance - Chamberlain segment revenues increased 13.1% year over year to $192.6 million, with total student enrollment rising 6.8% to 40,564 students [5] - Walden segment generated revenues of $178.4 million, up 18.5% year over year, with total student enrollment increasing 13.5% to 48,526 students [7] - Medical and Veterinary segment revenues increased 3.6% to $95 million, with total student enrollment slightly up by 1.2% to 5,133 students [8] Liquidity & Cash Flow - As of March 31, 2025, Adtalem had cash and cash equivalents of $219 million, with long-term debt reduced to $552.2 million from $648.7 million at the end of fiscal 2024 [10] - For the first nine months of fiscal 2025, cash provided by operating activities totaled $273.8 million, up from $227.1 million in the prior year [11] Fiscal 2025 Guidance - Adtalem raised its fiscal 2025 revenue guidance to a range of $1,760-$1,775 million, up from the previous estimate of $1,730-$1,760 million, and adjusted earnings guidance to $6.40-$6.60 per share from $6.10-$6.30 [12]

Q3 2025 Performance Highlights - Adtalem's revenue reached $466.1 million, a 12.9% increase compared to the prior year[16] - Adjusted EBITDA margin was 27.4%, a 150 bps increase compared to the prior year[17] - Adjusted EPS was $1.92, a 28.0% increase compared to the prior year[17] - Total enrollment grew by 9.8% year-over-year[15] Segment Performance - Chamberlain's revenue increased by 13.1% to $192.6 million, with a 6.8% increase in total enrollment[30] - Walden's revenue increased by 18.5% to $178.4 million, with a 13.5% increase in total enrollment[35] - Medical & Veterinary revenue increased by 3.6% to $95.0 million, with a 1.2% increase in total enrollment[40] Cash Flow and Capital Allocation - Trailing twelve months free cash flow was $287 million[21] - The company repaid $100 million of outstanding Term Loan B balance on January 17, 2025[21] - A new $150 million share repurchase authorization was approved through May 2028[21] FY 2025 Guidance - The company raised its revenue outlook to $1.760 billion - $1.775 billion[46] - The company raised its Adjusted EPS outlook to $6.40 - $6.60[46]

Core Viewpoint - Adtalem Global Education reported strong quarterly earnings, exceeding expectations and showing significant year-over-year growth in both earnings and revenues [1][2]. Financial Performance - The company achieved quarterly earnings of $1.92 per share, surpassing the Zacks Consensus Estimate of $1.63 per share, and up from $1.50 per share a year ago, representing an earnings surprise of 17.79% [1]. - Revenues for the quarter ended March 2025 were $466.06 million, exceeding the Zacks Consensus Estimate by 4.94% and up from $412.66 million in the same quarter last year [2]. Market Performance - Adtalem shares have increased approximately 26.3% since the beginning of the year, contrasting with a decline of -4.3% in the S&P 500 [3]. - The company's stock is currently rated Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6]. Future Outlook - Current consensus EPS estimate for the upcoming quarter is $1.50 on revenues of $436.92 million, and for the current fiscal year, it is $6.22 on revenues of $1.75 billion [7]. - The Schools industry, to which Adtalem belongs, is ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8].

Financial Data and Key Metrics Changes - Revenue increased by 12.9% to $466.1 million, driven by enrollment growth across all segments [13] - Adjusted EBITDA rose by 19.3% to $127.8 million, with an adjusted EBITDA margin of 27.4%, expanding by 150 basis points year over year [13][14] - Adjusted net income for the quarter was $73.3 million, a 23.4% increase compared to the previous year, leading to adjusted earnings per share of $1.92, up 28% [14] Business Line Data and Key Metrics Changes - Chamberlain University reported revenue of $192.6 million, a 13.1% increase, with enrollment up 6.8% [14][15] - Walden University achieved revenue of $178.4 million, an 18.5% increase, with total student enrollment up 13.5% [16] - The Medical and Veterinary segment saw revenue of $95 million, a 3.6% increase, with enrollment up 1.2% [17] Market Data and Key Metrics Changes - Total enrollment across Adtalem institutions climbed to over 94,000 students, marking a 9.8% year-over-year increase [5] - The medical schools achieved a first-time residency attainment rate of over 95%, with significant placements in medically underserved areas [9] Company Strategy and Development Direction - The company aims to expand program capacity and invest in innovation to meet growing demand in healthcare education [10] - A new $150 million share repurchase program was announced, reflecting confidence in the strategic outlook [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the favorable environment for career-oriented education, emphasizing high return on investment for students [28] - The company raised its 2025 revenue guidance to a range of $1.76 billion to $1.775 billion, anticipating adjusted EPS of $6.4 to $6.6 [9][19] Other Important Information - The company completed a $300 million share repurchase program, returning $763 million to shareholders since February 2022 [18] - The balance sheet remains strong, with $219 million in cash and a low adjusted EBITDA net leverage of 0.8 times [18] Q&A Session Summary Question: How do the 2026 targets stand in light of recent performance? - Management noted that the targets set at Investor Day were reasonable and they have outperformed expectations, with plans to recalibrate long-term growth targets [24][25] Question: What is the impact of recent legislative changes on student enrollment? - Management indicated no observed hesitancy among students regarding enrollment, citing strong demand for their programs [33] Question: Can you provide insight into margin degradation in the Medical and Veterinary segment? - Management explained that margin changes were due to one-time costs and investments for future growth, with confidence in long-term margin expansion [34][35] Question: What are the primary limitations on scaling up capacity? - Management identified opportunities for growth in existing programs and potential geographic expansion, with various strategies to increase capacity [50]

Financial Data and Key Metrics Changes - Revenue increased by 12.9% to $466.1 million, driven by enrollment growth across all segments [14] - Adjusted EBITDA rose by 19.3% to $127.8 million, with an adjusted EBITDA margin of 27.4%, expanding by 150 basis points year over year [14][15] - Adjusted net income for the quarter was $73.3 million, a 23.4% increase compared to the previous year, with adjusted earnings per share rising by 28% to $1.92 [15] Business Line Data and Key Metrics Changes - Chamberlain University reported revenue of $192.6 million, up 13.1%, with enrollment increasing by 6.8% [16] - Walden University achieved an 18.5% revenue increase to $178.4 million, with total student enrollment up 13.5% [18] - The Medical and Veterinary segment saw revenue growth of 3.6% to $95 million, with a slight enrollment increase of 1.2% [19] Market Data and Key Metrics Changes - Total enrollment across Adtalem institutions climbed to over 94,000 students, marking a 9.8% year-over-year increase [7] - The medical schools achieved a 95% first-time residency attainment rate, with over 615 students placed in healthcare facilities [10] Company Strategy and Development Direction - The company is focused on expanding program capacity and investing in innovation to meet growing demand in healthcare education [11] - A new $150 million share repurchase program was announced, reflecting confidence in the strategic outlook [10] - The company aims to balance growth investments with profitability, anticipating adjusted EBITDA margin expansion of more than 150 basis points for fiscal year 2025 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive environment for career-oriented education, emphasizing high return on investment for students [29] - The company is monitoring legislative developments closely but sees no current impact on student enrollment behavior due to potential funding pressures [33] Other Important Information - The company completed a $300 million share repurchase program, returning $763 million to shareholders since February 2022 [20] - Free cash flow for the trailing twelve months was $287 million, indicating strong operational performance [20] Q&A Session Summary Question: How do the 2023 Investor Day targets for FY 2026 stand? - Management acknowledged that targets set were reasonable and expressed satisfaction with outperforming them [25][26] Question: What are the implications of recent legislative proposals on student loans? - Management believes the proposals are generally positive for the industry, as their programs offer high return on investment [28][29] Question: Is there any hesitancy among students regarding enrollment due to funding pressures? - Management reported no signs of hesitancy among prospective or current students regarding financing their education [33] Question: What is the outlook for margin expansion in the Medical and Veterinary segment? - Management indicated confidence in long-term margin expansion despite short-term margin degradation due to investments [34][35] Question: What are the primary limitations on scaling up capacity? - Management identified opportunities for growth in existing programs and potential geographic expansion as key areas for scaling [50]