Why Is Adtalem Global Education Stock Soaring Today?

Adtalem Global Education Inc ATGE shares are trading higher by around 16% after the company reported better-than-expected Q1 FY24 results and issued FY24 guidance. 

The company reported revenue growth of 4.1% Y/Y to $368.8 million, beating the consensus of $357.3 million, with student enrollment rising 1.9% Y/Y to 81,073.

Chamberlain University witnessed the third consecutive quarter of total enrollment growth (+5.2% Y/Y) on continued acceleration in pre-licensure and post-licensure nursing programs and high persistence.

On the other hand, Walden University enrollment returned to growth (+0.5% Y/Y) in Q1, led by an increase in healthcare programs and high persistence. 

Adjusted EBITDA declined 3.8% Y/Y to $80.5 million, with margin contraction to 21.8% from 23.6% in Q3. Adjusted EPS of $0.93 beat the consensus of $0.80.

The company repurchased shares worth $92 million against an authorized share repurchase program of $300 million. 

As of September 30, 2023, cash and cash equivalents stood at $262.4 million.

FY24 Outlook: Adtalem raised revenue guidance to $1.470 billion-$1.530 billion (from $1.460 billion to $1.520 billion earlier) vs. consensus of $1.48 billion. It expects adjusted EPS of $4.25 to $4.45 (from $4.20 to $4.40 earlier) vs street view of $4.31.

Also, Baird upgraded the stock to Outperform from Neutral and raised its price target to $55 from $47.

Price Action: ATGE shares are up 16.1% at $50.22 on the last check Friday.