Adtalem authorizes new $150 million stock buyback

CHICAGO - Adtalem Global Education Inc. (NYSE: ATGE), a prominent healthcare education provider in the United States with a market capitalization of $4.2 billion, has announced the authorization of a new stock repurchase program. This program will enable the company to buy back up to $150 million of its common stock through May 2028. According to InvestingPro data, the company boasts a perfect Piotroski Score of 9, indicating exceptional financial strength.

The announcement comes on the heels of Adtalem completing its previous $300 million share repurchase program on Monday, well ahead of its January 2027 deadline. The company’s chairman and CEO, Steve Beard, cited strong fundamentals and the success of their "Growth with Purpose" strategy as key reasons for the early completion. The strategy appears to be working, with revenue growing at 12.8% and EBITDA reaching $386 million in the last twelve months. Beard highlighted the recent market dislocations as opportunities to buy back shares at favorable prices, thereby enhancing shareholder value.

Adtalem’s disciplined capital allocation and robust cash flow have allowed it to return $763 million to shareholders since February 2022, reducing its shares outstanding by 28% at an average repurchase price of around $49 per share. The stock has delivered an impressive 81% return over the past year and is currently trading near its 52-week high of $116. As of Monday, the company has approximately 36 million shares of common stock outstanding. Want deeper insights into Adtalem’s financial health and growth potential? InvestingPro offers exclusive analysis and 12 additional ProTips for informed investment decisions.

Bob Phelan, Adtalem’s senior vice president and chief financial officer, attributed the company’s healthy financial returns to its organic growth strategy and strong cash generation, which has fortified its balance sheet and enabled high-return capital deployment. The company maintains a moderate debt level with a debt-to-equity ratio of 0.6 and operates with a P/E ratio of 20.8.

The timing and volume of repurchases under the new authorization will be determined by market conditions and other factors, with the possibility of open market purchases, accelerated share repurchases, or privately negotiated transactions. The repurchases will be funded through cash on hand and operational cash generation and may be halted or discontinued at the company’s discretion.

Additionally, Adtalem is set to discuss its third quarter fiscal year 2025 results on a conference call scheduled for Thursday, after the financial markets close.

This new share repurchase authorization reflects Adtalem’s ongoing commitment to shareholder returns and its confidence in the company’s financial health and strategic direction. The information for this article is based on a press release statement from Adtalem Global Education Inc.

In other recent news, Jefferies has initiated coverage on Adtalem Global Education with a Buy rating and set a price target of $135. The firm highlights several factors that could contribute to further growth for Adtalem, emphasizing its position as a key player in the healthcare education sector. Jefferies notes that Adtalem is poised to benefit from a long-term structural supply deficit in healthcare labor, which is expected to drive market growth rates from mid-single digits to high-single digits. The company’s strong free cash flow and share buyback strategy are also pointed out as attractive features for investors. Additionally, Jefferies mentions that Adtalem has a conservative financial forecast for the second half of the fiscal year, suggesting that the company is well-prepared to meet or exceed its financial targets. The firm also observes that Adtalem’s current market valuation remains lower than its peers, indicating a potential opportunity for investors. This initiation of coverage underscores Jefferies’ positive outlook on Adtalem’s strategic positioning and growth potential in the expanding healthcare education market.

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