Universal Technical Institute (UTI) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Universal Technical Institute (UTI) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Universal Technical Institute Fundamentals
Stock Price Target: $18.04
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Universal Technical Institute in comparison to the Education industry and the S&P 500.
Universal Technical Institute is a Small Cap company with a Market Cap of $227.6M.
How are investors using Universal Technical Institute earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Universal Technical Institute is 19.41%, in comparison to 3.39% for the S&P 500 and 1.63% for the 10-year treasury bond. The median earnings yield for the Education industry is 5.16%.
What does University Technical Institute Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Universal Technical Institute is currently trading at a P/E of 35.02*. The P/E for the Education industry is 26.63 and the P/E for the S&P 500 is 28.63.
What is the current Price-to-Sales Ratio (P/S) for Universal Technical Institute?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Universal Technical Institute is currently trading at a P/S of 0.73. The P/S for the Education industry is 2.48 and the P/S for the S&P 500 is 3.11.
How does Universal Technical Institute Price-to-BookRatio (P/B) compare to the Education industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Universal Technical Institute P/B ratio is 2.22. The P/B for the Education industry is 2.92 and the P/B for the S&P 500 is 4.84.
How attractive is Universal Technical Institute Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Universal Technical Institute ROIC is currently 2.25% in comparison to 9.89% for the Education industry and 8.60% for the S&P 500.
What is Universal Technical Institute YTD Performance in comparison to its industry and the total market?
The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year.
The YTD performance for Universal Technical Institute is 13.47%. The Education industry has a YTD performance of -43.90% in comparison to the YTD S&P 500 performance of 25.02%.
Recent Financial Results
- Revenue reported of $97.5M in the fourth quarter, an increase of 27.7% compared to the prior year quarter ($335.1M for the full year, up 11.4% versus the prior year)
- Q4 2021 net income of $12M, up 86.7% from prior year period; net income for the year was $14.6M compared to $8M in the prior year
- Adjusted net income for the Q4 2021 of $13.9M, full year adjusted net income of $17.5M
- Q4 2021 Adjustsed EBITDA of $18.3M; full year Adjusted EBITDA of $32.5M
- FY22 Guidance: Revenue of $405 – $420.0M, new student start growth of 14% to 19% and Adjusted EBITDA of $50 – $55M
Stock Price Target: $18.04
Universal Technical Institute provides postsecondary education for students specializing in professional automotive and collision repair, motorcycle repair, electric vehicle technician training and marine technicians in the US. The company offers certificate, diploma and degree programs but primarily focuses on technical education programs.
The company operates under the following brands: Universal Technical Institute, Motorcycle Mechanics Institute, Marine Mechanics Institute and the NASCAR Technical Institute.
UTI currently operates across 12 campuses. The company was founded in 1965 and is headquartered in Phoenix, Arizona. The current CEO is Jerome Grant.
*Note: This P/E ratio is based on Universal Technical Institute’s Total Market Cap / Net Income.
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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.