Yahoo Finance Lincoln Educational Services Corporation (LINC) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Lincoln Educational Services Corporation (LINC)? Shares have been on the move with the stock up 25.7% over the past month. The stock hit a new 52-week high of $13.05 in the previous session. Lincoln Educational Services Corporation has gained 25.9% since the start of the year compared to the -2.8% move for the Zacks Consumer Discretionary sector and the 9.9% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 6, 2024, Lincoln Educational Services reported EPS of $0.06 versus consensus estimate of $0.02 while it beat the consensus revenue estimate by 6.23%.
For the current fiscal year, Lincoln Educational Services is expected to post earnings of $0.48 per share on $424.19 million in revenues. This represents a -2.04% change in EPS on a 12.2% change in revenues. For the next fiscal year, the company is expected to earn $0.54 per share on $468 million in revenues. This represents a year-over-year change of 12.5% and 10.33%, respectively.
Valuation Metrics
Lincoln Educational Services may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Lincoln Educational Services has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 26.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.5X. On a trailing cash flow basis, the stock currently trades at 15.4X versus its peer group's average of 11X. Additionally, the stock has a PEG ratio of 1.76. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Lincoln Educational Services currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Lincoln Educational Services meets the list of requirements. Thus, it seems as though Lincoln Educational Services shares could still be poised for more gains ahead.
How Does LINC Stack Up to the Competition?
Shares of LINC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Perdoceo Education Corporation (PRDO). PRDO has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of A.
Earnings were strong last quarter. Perdoceo Education Corporation beat our consensus estimate by 13.21%, and for the current fiscal year, PRDO is expected to post earnings of $2.21 per share on revenue of $653.72 million.
Shares of Perdoceo Education Corporation have gained 36.6% over the past month, and currently trade at a forward P/E of 10.82X and a P/CF of 9.87X.
The Schools industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LINC and PRDO, even beyond their own solid fundamental situation.
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Lincoln Educational Services Corporation (LINC) : Free Stock Analysis Report
Perdoceo Education Corporation (PRDO) : Free Stock Analysis Report
