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Investing.com - Goldman Sachs initiated coverage of Phoenix Education Partners (NYSE:PXED) with a Neutral rating and a $42.00 price target on Monday, representing potential upside from the current price of $36.95. According to InvestingPro data, the stock is currently trading near its 52-week low of $34.51.
The investment bank views PXED as a leading online university in the United States, highlighting its focus on serving adult learners with flexible, affordable, and career-relevant degree programs at both undergraduate and graduate levels. With a market capitalization of $1.32 billion and annual revenue of $990 million, PXED has established a significant presence in the online education sector.
Goldman Sachs noted that PXED’s transformation since 2017 has strengthened its market position through investments in AI-powered adaptive learning, enhanced student support services, and curriculum realignment focused on workforce-valued skills, all of which have improved both student appeal and regulatory compliance. This transformation has yielded financial benefits, with InvestingPro data showing the company maintains a healthy gross profit margin of 56.57% and is profitable over the last twelve months.
The firm identified several competitive advantages for PXED, including its position as the fifth largest accredited online university in the US by enrollment, strong brand awareness, pricing that is 70% below private non-profit colleges, and its AI-based learning platform. Financial stability reinforces these advantages, with a current ratio of 1.98 indicating liquid assets comfortably exceed short-term obligations.
Goldman Sachs projects that PXED can maintain mid-single-digit revenue growth over the medium-to-longer term driven by enrollment increases, with B2B enrollments (approximately 30% of total) serving as a key growth driver that also enhances regulatory compliance. This aligns with InvestingPro forecasts showing 7% revenue growth for FY2025 and expected earnings per share of $3.22. InvestingPro analysis suggests the stock may be undervalued based on its Fair Value assessment, with additional ProTips available for subscribers.
In other recent news, Phoenix Education Partners completed its initial public offering (IPO) of 4,250,000 common stock shares, priced at $32.00 per share. The shares, offered by existing shareholders, generated approximately $136 million before accounting for underwriting discounts and other expenses. Notably, the stock began trading on the New York Stock Exchange at $38 per share, surpassing its initial IPO price. BMO Capital has initiated coverage on Phoenix Education Partners with an Outperform rating and a $45.00 price target. Jefferies also began coverage with a Buy rating and a $46.00 price target, noting the company’s attractive valuation compared to peers. Both investment firms have expressed positive outlooks on Phoenix Education Partners’ market position and financial metrics. These developments reflect growing interest and confidence in the company from the investment community.
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