Buy Rating Affirmed on Universal Technical Institute Following Strong Fiscal Performance and Upward Guidance Revision

Analyst Alexander Paris of Barrington reiterated a Buy rating on Universal Technical Institute (UTI – Research Report), with a price target of $20.00.

Alexander Paris has given his Buy rating due to a combination of factors including the impressive financial performance of Universal Technical Institute in its fiscal second quarter, which surpassed expectations. This performance was characterized by a notable increase in revenues, primarily attributed to growth in new student enrollments at both UTI and Concorde. Adjusted EBITDA and diluted EPS also saw significant increases, reinforcing the positive outlook.
Furthermore, the upward revision of FY/24 guidance by UTI’s management, reflecting continued momentum and effective strategic execution, supports the optimistic stance. The revised guidance indicates higher projections for new student starts, revenue, net income, and diluted EPS. Despite the stock’s significant year-to-date increase, it still trades at a reasonable valuation multiple compared to peers, which, when combined with Paris’s increased revenue and earnings expectations, justifies the Outperform rating and a raised price target.

In another report released today, Northland Securities also maintained a Buy rating on the stock with a $18.00 price target.

Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of UTI in relation to earlier this year.

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Universal Technical Institute (UTI) Company Description:

Universal Technical Institute, Inc. engages in the provision of postsecondary education. It operates through the Postsecondary Education and Other segments. The Postsecondary Education segment offers technical training for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as well as welders and CNC machining technicians. The Other segment provides manufacturer-specific training and these operations are managed separately from campus operations. The company was founded by Robert I. Sweet in 1965 and is headquartered in Scottsdale, AZ.