Download PDF

1. Company Snapshot

1.a. Company Description

Universal Technical Institute, Inc.provides transportation and technical training programs in the United States.The company provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle, and marine technicians.


It also offers certificate, diploma, or degree programs under various brands, such as Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute, and NASCAR Technical Institute.In addition, the company provides manufacturer specific advanced training programs, including student paid electives at its campuses; and manufacturer or dealer sponsored training at various campuses and dedicated training centers, as well as offers programs for welding and computer numeric control machining.As of September 30, 2021, it operated 12 campuses.


Universal Technical Institute, Inc.was founded in 1965 and is headquartered in Phoenix, Arizona.

Show Full description

1.b. Last Insights on UTI

Universal Technical Institute, Inc.'s recent performance was negatively impacted by increasing competition, as evident from the comparison with Perdoceo Education (PRDO). The company's upcoming fiscal fourth quarter and full-year 2025 conference call may provide insight into its strategy to address this competition. Additionally, investor sentiment was affected by institutional investors reducing their stakes in Patterson-UTI Energy, Inc. (PTEN), a company in a related sector. UTI's expansion of its UTI-Dallas campus with new programs may help mitigate these negative factors.

1.c. Company Highlights

2. Universal Technical Institute's Strong FY2025 Results Set Stage for Continued Growth

Universal Technical Institute reported robust financial performance for fiscal year 2025, with revenue reaching $835.6 million, a 14% year-over-year increase, and adjusted EBITDA of $126.5 million. Earnings per share (EPS) came in at $0.34, beating estimates of $0.26. The company's strong revenue growth was driven by a 10% increase in average full-time active students and an 11% rise in new student starts. The results underscore the effectiveness of the company's North Star strategy, which has focused on growth, diversification, and optimization.

Publication Date: Nov -24

📋 Highlights
  • Revenue Growth: FY2025 revenue reached $836 million, a 14% YoY increase, surpassing raised guidance and growing from $300 million in 2020.
  • Adjusted EBITDA Expansion: Adjusted EBITDA rose to $126.5 million in FY2025, up from $14 million in 2020, reflecting operational efficiency and scale.
  • Student Growth: Full-time active students increased 10% YoY, with new student starts up nearly 11%, driven by demand for skilled trades and healthcare programs.
  • 2026 Guidance: Revenue expected to reach $905–$915 million (9% growth), with adjusted EBITDA projected at $114–$119 million, despite negative Q1–Q2 growth.
  • Capital Expenditure Plan: $100 million annual CapEx for 2026–2029, funding 3–5 new campuses and 20 new programs yearly, targeting $1.2 billion revenue by 2029.

Operational Highlights

The company made significant operational progress in fiscal 2025, launching 19 new programs across its two divisions, enhancing its operational foundation, and optimizing its campuses. These efforts have positioned the company for continued growth and expansion into new markets. As Jerome Grant noted, "We launched new programs at scale, extending our reach into fast-growing sectors and expanding access for students nationwide."

Outlook and Guidance

Looking ahead to fiscal 2026, Universal Technical Institute expects revenue to grow 9% year-over-year, reaching $905 million to $915 million, with adjusted EBITDA ranging from $114 million to $119 million. The company plans to open three new campuses and launch approximately 20 new programs, driving continued growth and expansion. Analysts estimate revenue growth of 9.2% for the next year, in line with the company's guidance.

Valuation and Returns

Universal Technical Institute's current valuation metrics suggest a reasonable price for its growth prospects. The stock trades at a P/E ratio of 19.57, P/B ratio of 3.76, and EV/EBITDA of 11.94. The company's return on equity (ROE) stands at 20.85%, indicating strong profitability. With a net debt to EBITDA ratio of 1.15, the company's leverage is manageable. As the company continues to invest in growth initiatives, its ROIC stands at 12.72%, suggesting a healthy return on invested capital.

Growth Prospects and Risks

The company's growth prospects are underpinned by its expanding campus footprint, new program launches, and increasing demand for skilled trades and healthcare careers. However, the company's guidance assumes consistent growth and modernization of its campuses, and any disruptions to this plan could impact its returns. The potential impact of regulatory changes, such as the Department of Education being dismantled, is a risk factor, although Jerome Grant believes that the Title IV funding entity would not be disrupted.

3. NewsRoom

Card image cap

Market Today: Netflix-WBD Deal, X Fined, Meta's News Pacts

Dec -05

Source: gurufocus.com

Card image cap

First Look: Netflix buys WBD, Meta cuts metaverse, Cloudflare outage

Dec -05

Source: gurufocus.com

Card image cap

CW Advisors LLC Acquires New Position in Universal Technical Institute Inc $UTI

Dec -05

Source: defenseworld.net

Card image cap

Market Today: WBD Sale Bids, Meta Cuts, Apple Shake-Up

Dec -04

Source: gurufocus.com

Card image cap

First Look: Insurers, Auto Rules, AI and Fed Jitters

Dec -04

Source: gurufocus.com

Card image cap

Universal Technical Institute, Inc. CEO Jerome Grant Testifies Before House Committee on Veterans' Affairs Subcommittee on Economic Opportunity

Dec -02

Source: prnewswire.com

Card image cap

Hyundai Motor America Donates 18 Electric Vehicles to Universal Technical Institute

Dec -02

Source: prnewswire.com

Card image cap

Patterson-UTI Energy: An Overlooked And Undervalued Oil Trade

Nov -26

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.74%)

6. Segments

UTI

Expected Growth: 8.5%

UTI's 8.5% growth driven by increasing demand for skilled technicians in the automotive and industrial sectors, expansion of employer partnerships, and strategic investments in online and hybrid programs, enhancing student experience and improving operational efficiency.

Concorde

Expected Growth: 9.33%

Concorde's 9.33% growth is driven by increasing demand for skilled technicians in the healthcare industry, strategic campus expansions, and effective marketing efforts. Additionally, the company's focus on providing specialized training programs in high-growth fields such as nursing and dental assisting contributes to its growth momentum.

7. Detailed Products

Automotive Technician Training

Universal Technical Institute, Inc. offers a comprehensive training program for aspiring automotive technicians, providing hands-on training and classroom instruction to prepare students for a career in the automotive industry.

Diesel and Industrial Technician Training

This program provides training in diesel engine repair, heavy equipment operation, and industrial equipment maintenance, preparing students for a career in the diesel and industrial industries.

Collision Repair and Refinish Technician Training

This program teaches students the skills needed to repair and refinish vehicles, including metalworking, welding, and painting techniques.

Motorcycle Technician Training

This program provides training in motorcycle repair and maintenance, including brake systems, suspension, and engine repair.

Nissan Technician Training

This program provides training in Nissan-specific vehicle systems, including engine management, transmission, and brake systems.

Ford FACT Technician Training

This program provides training in Ford-specific vehicle systems, including engine management, transmission, and brake systems.

8. Universal Technical Institute, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Universal Technical Institute, Inc. faces moderate threat from substitutes, as students have alternative options for technical education and training.

Bargaining Power Of Customers

Customers have limited bargaining power due to the specialized nature of technical education and training provided by Universal Technical Institute, Inc.

Bargaining Power Of Suppliers

Suppliers of equipment and materials have limited bargaining power due to the company's large scale of operations and diversified supply chain.

Threat Of New Entrants

The technical education and training industry is highly competitive, and new entrants can easily enter the market, posing a significant threat to Universal Technical Institute, Inc.

Intensity Of Rivalry

The technical education and training industry is highly competitive, with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.74%
Debt Cost 4.05%
Equity Weight 39.26%
Equity Cost 9.99%
WACC 6.38%
Leverage 154.72%

11. Quality Control: Universal Technical Institute, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
American Public Education

A-Score: 6.3/10

Value: 5.7

Growth: 5.6

Quality: 8.6

Yield: 2.0

Momentum: 10.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
American Public Education

A-Score: 4.9/10

Value: 4.9

Growth: 5.4

Quality: 5.7

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

View Full Report
Stock-Card
Universal Technical Institute

A-Score: 4.9/10

Value: 3.3

Growth: 6.3

Quality: 6.1

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Lincoln Educational Services

A-Score: 4.5/10

Value: 4.1

Growth: 5.0

Quality: 4.0

Yield: 0.0

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Coursera

A-Score: 4.4/10

Value: 6.9

Growth: 6.0

Quality: 3.1

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Udemy

A-Score: 3.9/10

Value: 6.4

Growth: 5.8

Quality: 4.1

Yield: 0.0

Momentum: 3.5

Volatility: 3.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

25.5$

Current Price

25.5$

Potential

-0.00%

Expected Cash-Flows