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On Thursday, Texas Capital Securities initiated coverage on Lincoln Educational Services (NASDAQ:LINC) with a Buy rating and a price target of $26.00. The firm’s analyst, Raj Sharma, highlighted Lincoln Educational Services as the second-largest publicly traded for-profit trade school in the United States, noting its counter-cyclical nature which tends to benefit from an economic downturn. According to InvestingPro data, the company has demonstrated this resilience with impressive 15.24% revenue growth over the last twelve months.
Sharma pointed out that despite traditionally performing well in times of rising unemployment, Lincoln Educational Services has managed to increase student enrollment and revenues even in a typically challenging environment for the sector. This performance comes after the company underwent years of cost-cutting and restructuring efforts. The company maintains strong operational efficiency with a 59.02% gross profit margin and operates with a moderate level of debt, as revealed by InvestingPro analysis, which offers 15+ additional key insights about the company.
The analyst also mentioned that the regulatory pressures that have historically weighed on for-profit education companies have been easing, particularly for established players like Lincoln Educational Services. Sharma attributes this in part to the political climate, suggesting that the Trump Administration’s policies have provided a more level playing field for the for-profit education sector and have allowed companies like Lincoln to pursue disciplined growth plans.
The $26 price target set by Texas Capital Securities represents a significant endorsement of Lincoln Educational Services’ current strategy and market position. The analyst’s comments underscore the company’s ability to navigate a traditionally unfavorable industry environment successfully. Trading near its 52-week high of $22.27, the stock currently commands a P/E ratio of 55.14, suggesting investors are pricing in significant growth expectations.
Lincoln Educational Services’ stock rating has been set to Buy by Texas Capital Securities, reflecting a positive outlook on the company’s future performance and growth potential within the for-profit education industry. The new coverage and price target suggest confidence in Lincoln’s strategic direction and its capacity to continue expanding its student base and revenue streams. The stock has delivered an impressive 80.62% return over the past year, though InvestingPro analysis indicates the stock may be in overbought territory, with comprehensive valuation metrics available in the Pro Research Report.
In other recent news, Lincoln Educational Services reported a robust first-quarter 2025 performance, exceeding earnings expectations with an earnings per share (EPS) of $0.06, compared to a forecast of -$0.02. The company also saw a 16% year-over-year revenue increase, reaching $117.5 million. This growth is attributed to a 20.9% rise in student starts and improved marketing efficiency. Lincoln Educational has raised its full-year revenue guidance to between $485 million and $495 million. Rosenblatt Securities recently increased its price target for Lincoln Educational Services to $25 while maintaining a Buy rating, citing the company’s strategic focus on healthcare and skilled trades education. The firm believes Lincoln Educational is well-positioned to benefit from economic trends, such as increased domestic manufacturing. Recent initiatives by Lincoln Educational include the launch of a hybrid teaching model and campus expansions, aiming to support future growth. The company plans to open three new campuses in 2025, with a long-term goal of reaching $550 million in revenue by 2027.
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