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On Thursday, Texas Capital Securities began coverage of Universal Technical Institute (NYSE:UTI) with a Buy rating and set a price target at $38.00. The stock, currently trading at $34.29, has delivered an impressive 141% return over the past year according to InvestingPro data, which also indicates the stock’s RSI suggests overbought conditions. The firm’s analysts point to the company’s countercyclical business model as a key strength, noting that Universal Technical Institute tends to see increased enrollment during economic downturns.
Universal Technical Institute has managed to increase student starts despite the current economic strength. This growth is attributed to successful marketing initiatives targeting high school students and individuals seeking a career change. Additionally, the company has adapted to student needs by offering smaller, commuter-friendly campus formats.
Analysts from Texas Capital Securities also highlighted that Universal Technical Institute could see sustained growth in student starts even if the economy slows or unemployment rates rise. They believe that the company’s recent acquisitions, new campuses, and program offerings will continue to drive enrollment growth.
The company’s position in the market is further secured by a significant supply-demand gap in industrial skills, which is expected to support Universal Technical Institute’s growth for the foreseeable future. Texas Capital Securities suggests that this gap assures a solid path forward for UTI, regardless of potential economic headwinds. For deeper insights into UTI’s valuation and growth prospects, investors can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research reports.
In other recent news, Universal Technical Institute reported impressive financial results for the second quarter of 2025, exceeding both earnings and revenue expectations. The company’s earnings per share stood at $0.21, surpassing the projected $0.12, while revenue reached $207.4 million, outpacing the anticipated $196.52 million. This strong performance was bolstered by a 21.4% increase in new student starts, reflecting robust demand for the institute’s educational programs. Following these results, Truist Securities raised its price target for Universal Technical Institute to $40, maintaining a Buy rating due to favorable investor sentiment and potential EBITDA growth. This comes after a previous increase in the price target to $37, which was driven by favorable second-quarter results and an optimistic fiscal year 2025 guidance. Analysts from Truist Securities have noted that the company’s strategic investments, particularly in its North Star strategy, may lead to moderate EBITDA growth in the near term but are optimistic about long-term prospects. Universal Technical Institute continues to expand its program offerings and campus locations, aiming to capitalize on the growing demand for skilled trades and healthcare professionals.
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