Shares of Perdoceo Education (PRDO) have been strong performers lately, with the stock up 27% over the past month. The stock hit a new 52-week high of $32.08 in the previous session. Perdoceo Education has gained 21% since the start of the year compared to the 5.4% move for the Zacks Consumer Discretionary sector and the 8.2% 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 1, 2025, Perdoceo Education reported EPS of $0.7 versus consensus estimate of $0.66 while it beat the consensus revenue estimate by 2.42%.
For the current fiscal year, Perdoceo Education is expected to post earnings of $2.49 per share on $832.34 million in revenues. This represents an 8.73% change in EPS on a 22.18% change in revenues. For the next fiscal year, the company is expected to earn $2.66 per share on $864.22 million in revenues. This represents a year-over-year change of 6.83% and 3.83%, respectively.
Valuation Metrics
Perdoceo Education 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 is due for a pullback from this level.
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.
Perdoceo Education has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 16.8X. On a trailing cash flow basis, the stock currently trades at 12.5X versus its peer group's average of 13X. Additionally, the stock has a PEG ratio of 0.86. 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, Perdoceo Education 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 Perdoceo Education meets the list of requirements. Thus, it seems as though Perdoceo Education shares could have a bit more room to run in the near term.
How Does PRDO Stack Up to the Competition?
Shares of PRDO 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 Adtalem Global Education Inc. (ATGE). ATGE has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Adtalem Global Education Inc. beat our consensus estimate by 17.79%, and for the current fiscal year, ATGE is expected to post earnings of $7.47 per share on revenue of $1.77 billion.
Shares of Adtalem Global Education Inc. have gained 20.4% over the past month, and currently trade at a forward P/E of 19.9X and a P/CF of 15.46X.
The Schools industry is in the top 9% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PRDO and ATGE, even beyond their own solid fundamental situation.
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Perdoceo Education Corporation (PRDO): Free Stock Analysis Report Adtalem Global Education Inc. (ATGE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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