Universal Technical Institute (NYSE:UTI) Surprises With Q1 Sales, Full-Year Sales Guidance Is Optimistic By Stock Story

Vocational education Universal Technical Institute (NYSE:)
reported Q1 CY2024 results topping analysts’ expectations, with revenue up 12.4% year on year to $184.2 million. The company’s full-year revenue guidance of $725 million at the midpoint also came in 1.3% above analysts’ estimates. It made a GAAP profit of $0.14 per share, improving from its profit of $0.04 per share in the same quarter last year.

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Universal Technical Institute (UTI) Q1 CY2024 Highlights:

• Revenue: $184.2 million vs analyst estimates of $177.2 million (4% beat)
• EPS: $0.14 vs analyst expectations of $0.15 (4.1% miss)
• The company lifted its revenue guidance for the full year from $715 million to $725 million at the midpoint, a 1.4% increase
• Gross Margin (GAAP): 47.1%, down from 55.2% in the same quarter last year
• Free Cash Flow was -$8.40 million, down from $6.99 million in the previous quarter
• New Students: 5,480
• Market Capitalization: $893.6 million

Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.

Education ServicesA whole industry has emerged to address the problem of rising education costs, offering consumers alternatives to traditional education paths such as four-year colleges. These alternative paths, which may include online courses or flexible schedules, make education more accessible to those with work or child-rearing obligations. However, some have run into issues around the value of the degrees and certifications they provide and whether customers are getting a good deal. Those who don’t prove their value could struggle to retain students, or even worse, invite the heavy hand of regulation.

Sales GrowthReviewing a company’s long-term performance can reveal insights into its business quality. Any business can have short-term success, but a top-tier one tends to sustain growth for years. Universal Technical Institute’s annualized revenue growth rate of 16.6% over the last five years was decent for a consumer discretionary business.

Within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. That’s why we also follow short-term…