Analyzing Perdoceo Education (NASDAQ:PRDO) and Lincoln Educational Services (NASDAQ:LINC)

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Perdoceo Education (NASDAQ:PRDO) and Lincoln Educational Services (NASDAQ:LINC) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.

Earnings and Valuation

This table compares Perdoceo Education and Lincoln Educational Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Perdoceo Education $581.30 million 2.19 $55.18 million $1.05 17.26
Lincoln Educational Services $263.20 million 0.22 -$6.55 million ($0.27) -8.56

Perdoceo Education has higher revenue and earnings than Lincoln Educational Services. Lincoln Educational Services is trading at a lower price-to-earnings ratio than Perdoceo Education, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Perdoceo Education and Lincoln Educational Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Perdoceo Education 9.20% 26.01% 18.18%
Lincoln Educational Services -0.80% -6.17% -1.40%

Insider & Institutional Ownership

85.6% of Perdoceo Education shares are held by institutional investors. Comparatively, 66.2% of Lincoln Educational Services shares are held by institutional investors. 5.6% of Perdoceo Education shares are held by company insiders. Comparatively, 6.3% of Lincoln Educational Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Perdoceo Education has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Lincoln Educational Services has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Perdoceo Education and Lincoln Educational Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Perdoceo Education 0 0 1 0 3.00
Lincoln Educational Services 0 0 1 0 3.00

Perdoceo Education currently has a consensus price target of $26.00, indicating a potential upside of 43.49%. Lincoln Educational Services has a consensus price target of $3.50, indicating a potential upside of 51.52%. Given Lincoln Educational Services’ higher probable upside, analysts clearly believe Lincoln Educational Services is more favorable than Perdoceo Education.

Summary

Perdoceo Education beats Lincoln Educational Services on 10 of the 12 factors compared between the two stocks.

About Perdoceo Education

Perdoceo Education Corporation operates colleges, institutions, and universities that provide education to student population in various career-oriented disciplines through online, campus based, and blended learning programs in the United States. It operates through three segments: Colorado Technical University, American InterContinental University, and All Other Campuses. The company offers doctoral, master's, bachelor's, and associate degrees, as well as certificate programs. It also provides academic programs in the career-oriented disciplines of business studies, nursing, computer science, engineering, information systems and technologies, cybersecurity, criminal justice, and healthcare management; and educational programs in culinary arts, as well as patisserie and baking. As of December 31, 2018, the company had a total student enrollment of approximately 34,400 students. The company was formerly known as Career Education Corporation and changed its name to Perdoceo Education Corporation in January 2020. Perdoceo Education Corporation was founded in 1994 and is headquartered in Schaumburg, Illinois.

About Lincoln Educational Services

Lincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates in three segments: Transportation and Skilled Trades; Healthcare and Other Professions; and Transitional. It offers associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and information technology areas. The company operates 22 schools in 14 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, Euphoria Institute of Beauty Arts and Sciences, and associated brand names. As of December 31, 2018, it had 10,525 students enrolled. Lincoln Educational Services Corporation was founded in 1946 and is headquartered in West Orange, New Jersey.

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