Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, Northland initiated coverage on Lincoln Educational Services (NASDAQ:LINC) with an Outperform rating and established a price target of $24.00. The firm highlighted the company’s focus on career-oriented education, which includes programs in skilled trades, automotive technology, and healthcare/IT services. According to Northland, Lincoln Educational is poised to benefit from favorable macroeconomic trends such as the increasing demand for skilled trades and healthcare professionals, as well as a growing preference for more cost-effective education alternatives compared to traditional four-year degrees. The company’s strong market position is reflected in its impressive 72% return over the past year and robust revenue growth of 16.4%, according to InvestingPro data.
Lincoln Educational’s current enrollment composition, as emphasized by Northland, consists of approximately 45% in skilled trades, 29% in automotive technology, and 26% in healthcare and IT services. The research firm believes that this diversified mix of programs positions the company to meet the evolving needs of the job market effectively. This strategic positioning has contributed to the company’s impressive gross profit margin of 58.7%, though InvestingPro analysis indicates the stock is currently trading above its Fair Value.
The Outperform rating is based on Northland’s confidence in Lincoln Educational’s potential to take advantage of the current market conditions. The firm’s optimistic outlook is further supported by the expectation that the company will experience significant multiple expansion as it continues to implement its growth strategy.
Northland’s price target of $24.00 for Lincoln Educational’s stock represents a positive perspective on the company’s future performance. The target is set with the view that the company will continue to grow and expand its influence in the education sector, particularly in areas of high demand for skilled labor.
Lincoln Educational Services has not publicly responded to Northland’s coverage initiation and price target at the time of this report. The education provider continues to offer a range of programs aimed at equipping students with the skills needed for careers in industries with high labor demand.
In other recent news, Lincoln Educational Services reported robust financial results for the fourth quarter of 2024, surpassing expectations. The company achieved earnings per share of $0.3056 and revenue of $119.4 million, both exceeding analyst forecasts. This strong performance contributed to a 16.4% increase in full-year revenue, reaching $440.1 million, alongside a 60% growth in adjusted EBITDA to $42.3 million. Lincoln Educational ended the year with nearly $60 million in cash and no debt, highlighting its solid financial position.
Additionally, B.Riley resumed coverage of Lincoln Educational with a Buy rating and a $23 price target, adjusting their financial projections in light of the company’s recent earnings report. They foresee a decrease in revenue for fiscal year 2025 to $486 million, slightly above the company’s guidance, while raising their EBITDA estimate to $57 million. Meanwhile, Rosenblatt Securities increased their price target for Lincoln Educational to $24, maintaining a Buy rating, citing the company’s undervaluation compared to peers despite strong execution and favorable industry trends.
Lincoln Educational’s strategic initiatives, including the Lincoln 10.0 hybrid teaching model, are expected to drive future growth. B.Riley anticipates these efforts will enhance free cash flow in fiscal year 2026 and beyond. The company’s focus on expanding its footprint and program offerings aligns with its projections for revenue and EBITDA growth in the coming years.
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