If you are like me, you may want to think about whether this company will grow or shrink. 2018 Universal Technical Institute, Inc. All rights reserved. Therefore, you should not rely on any of these forward-looking statements. Universal Technical Institute (UTI) suffers from unreasonably high valuation and steadily declining enrollment. You can exercise your right to opt There simply isn't enough in the variable costs to cut to balance the huge drop in student population. institution andcannot guarantee employment or salary. It may take several years before the current efforts bear fruit, if they do at all. information about your activities on our website, which is then associated with your browser, device or online identifier. The most recent data shows that average enrollment has again decreased in 2014, which exerts further downward pressure on profitability. The staff here is friendly,, YL M. said: After seeing the reviews posted here, some with no merit on the actual, Kelvin P. said: This school really teaches you the ins and outs of welding not just, Tommy L. said: This is an honest opinion about the school, not a fake review like you. Special conditions may apply. UTI also authorized a buyback program of $25 million in 2011. This shows at least some alignment. UTI's actual results and financial condition may differ materially from those indicated in the forward-looking statements. We can see that Universal Technical Institute does have institutional investors; and they hold a good portion of the company's stock. The current price of the stock implies the company will generate outsized profit growth far beyond what I think is likely to occur. Upon completion of the Concorde acquisition, the company will serve over 20,000 students across 14 states and 312locations. Universal Technical Institute serves three student segments: high school, veterans, and adult. has resulted in lower new student starts, fewer retention rates, and an ongoing plunge in average student population, which has fallen for years. In order to justify its current valuation of ~$9.50/share, UTI mustgrow NOPAT by 17% compounded annually for 12 years. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. We expect the transaction to close during the first half of fiscal 2023, subject to regulatory approvals and other customary closing conditions.". [21] A planned Miramar, Florida campus opened in Summer of 2022. According to theDepartment of Education, for-profit colleges account for only 13% of the higher education population but nearly half of all loan defaults. New rulesrelated to the Telephone Consumer Protection Act (TCPA) went into effect in October 2013 that have made it more difficult for telemarketers to reach consumers that have not given prior consent to receive calls. [18][19], Since December 2018, Universal Technical Institute has seen a significant drop in the number of students enrolled. The scholarship growth angle is a good one, but unless it includes a large number of students it won't do much to change the performance of UTI over the long term. One way it is attempting to build up the value of the education it offers students is by customizing programs according to the requirements of prospective employers. [2], In January 1998, UTI acquired Clinton Harley Corporation and Clinton Education Group, Inc. for $26.3 million. It offers diploma, undergraduate degree, and certificate programs. Many look for medium term catalysts that will drive the share price higher. Its revenue fell by 16% between 2011 and 2013 while operating profit (NOPAT) fell by 65%. It's one of the areas it can manage, and it's showing some improvement in that regard, even if it's only for one month at this time. If Tennessees program is a success, the free community college initiative could spread to other states. "We are pleased to welcome Concorde's leadership team, faculty and staff, and, most importantly its students, to the Company," said Universal Technical Institute Chief Executive Officer Jerome Grant. Concorde Career Colleges' 20 student-focused academic programs and personalized support prepare graduates for in-demand careers in nursing, dental, respiratory, diagnostic, and other health care roles. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. In the last year, its cash burn was US$36m. I have no business relationship with any company whose stock is mentioned in this article. Net income for the first half of fiscal 2013 is $2.6 million, or $0.11 per share, compared to $6.4 million or $0.26 per share year-over-year. With 70% stake, institutions possess the maximum shares in the. 48) The U.S. Bureau of Labor Statistics projects that total national employment for Bus and Truck Mechanics and Diesel Engine Specialists will be 305,800 by 2031. As long as the company is focused on that, the details aren't that important. This rate excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. You may opt-out of receiving targeted advertisements from other companies that perform interest-based advertising services, including some that we may work with, via the Digital Advertising Alliance (DAA) site at http://optout.aboutads.info. 2) For important information about the educational debt, earnings and completion rates of students who attended this program, visit our website atwww.uti.edu/disclosures. Find out what some of our graduates are doing today in pursuing their successful careers. Other than cutting variable costs, the other major thing UTI must do is build back its student population. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. These forward-looking statements which addressUniversal Technical Institute, Inc.'s ("UTI") expected future business and financial performance may contain words such as "goal," "target," "future," "estimate," "expect," "anticipate," "intend," "plan," "believe," "seek," "project," "may," "should," "will," the negative form of these expressions or similar expressions. They aren't always helpful and tuition way overpriced. SOURCE Universal Technical Institute, Inc. Download our catalogs and learn about programs, courses, tuition, fees, admissions and much more. It's always worth thinking about the different groups who own shares in a company. UTI may be able to pay out a high dividend and maintain its buyback for a while, but unless it can manage a dramatic and improbable turnaround in its business, the stock will continue to fall. The concern to me is the overall trend concerning education, which is one that the general population believes isn't worth the cost and accompanying huge debt associated with it. UTI cannot guarantee employment or salary. Therefore, you should not rely on any of these forward-looking statements. I further understand and agree that I may instead call MIAT at 1-800-477-1310 for Canton, MI and 1-888-547-7047 for Houston, TX or UTI at 1-800-913-7524 to request admission information. Universal Technical Institute - Reviews. As I write the share price of the company is at $11.26. So while increasing inquiries is a good strategy, it's unclear and very uncertain with the current headwinds whether or not that can be improved in any way. Examples of forward-looking statements include, among others, statements regarding (1) UTI's belief that the acquisition will serve as a cornerstone for its key future growth and diversification efforts; (2) UTI's ability to integrate Concorde's healthcare programs into its portfolio of educational offerings; (3) UTI's anticipated expansion efforts; (4) UTI's expectation of increasing shareholder value; and (5) UTI's expectation of accelerating its revenue, profitability and cash flow over the next several years. NTT provided intensive training seminars to technicians in sectors similar to the sectors that they served. If UTI can return to the profits it earned in 2011, the stock would be closer to reasonably valued. The growing strategy on the part of students to test out of college courses to lower costs and the time it takes to graduate also doesn't bode well for UTI and similar educational institutions. The boards of directors of both companies have unanimously approved the agreement. Approximately 250,000 students have graduated from one of Universal Technical Institute's 14 campuses located across Arizona, California, Florida, Illinois, Michigan, North Carolina, Pennsylvania, New Jersey, and Texas. Concorde Career Colleges offers more than 20 programs across the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. Dividends Cannot Protect You From A Big Drop In the Stock Price. Important factors that could affect UTI's actual results include, among other things, changes to federal and state educational funding, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, possible failure or inability to obtain regulatory consents and certifications for new or modified campuses or instruction, potential increased competition, impacts related to the COVID-19 pandemic, changes in demand for the programs UTI offers, increased investment in management and capital resources, the effectiveness of UTI student recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic and political conditions, the adoption of new accounting standards, and other risks that are described from time to time in UTI's public filings. The Concorde Career Colleges blended education model combines online coursework with in-person lab classes and clinical experiences. The company's largest shareholder is Park West Asset Management LLC, with ownership of 7.1%. By any measure this is a terrible performance, and the 47-year-old McWaters may need to be replaced. The fall in revenue was directly tied to the decline in students attending the school. Universal Technical Institute (NYSE:UTI) has been struggling lately, and there's little to suggest this stock is going to recover anytime soon, making it a good candidate to short or get out of altogether. Forward-looking statements are neither historical facts nor assurances of future performance. [20] In Spring of 2022, UTI opened the Austin, Texas campus. Universal Technical Institute, Inc. (UTI). Last year in the quarter UTI generated $1.9 million or $0.08 per diluted share. For more information, visit www.uti.edu, or follow on LinkedIn @UniversalTechnicalInstitute and on Twitter @news_UTI. Second Quarter Fiscal Year 2022 Results conference call, https://www.bls.gov/ooh/healthcare/home.htm. Find out more here. That's interesting, because hedge funds can be quite active and activist. [13][14] On Dec. 1, 2022,[15] UTI announced it had closed on the acquisition of Concorde Career Colleges, Inc., which was announced on May 3, 2022[16][17] UTI and Concorde Career Colleges together now serve 20,000+ students across 14 states and 33 locations. UTI expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions. With 70% stake, institutions possess the maximum shares in the company. Universal Technical Institute, Inc. (NYSE: UTI), a leading workforce solutions provider of transportation and skilled trades education programs, today announced the close of its acquisition of . In this case, in addition to its dividend, UTI repurchased overvalued stock. 2023 Universal Technical Institute, Inc. All rights reserved. Further, if you use multiple browsers or devices, you will need to execute this opt-out on each browser or device. Investors should not expect the companys current buyback and dividend to continue much longer. Concorde offers over 20 programs across the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. Combined it resulted in the operating loss of $1.9 million in the second quarter. Opinions expressed by Forbes Contributors are their own. sharing for online advertising may be considered a sale of information. But to understand Universal Technical Institute better, we need to consider many other factors. UTI shares have fallen to under $10 since the buyback began, which indicates that the share repurchase program has destroyed over 20% of the $8.8 million purchased, or around $2 million in value. Factoring in this hidden liability reveals that UTI is much less profitable than it appears on the surface. Since the industry has very high fixed costs, student growth and retention is basically the entire game. In fiscal 2022, Universal Technical Institute completed the acquisition of MIAT College of Technology, which brought 2 campuses and 8 unique programs. All shareholders and investors need to watch to evaluate the company is its success or failure at growing its student population. Bulls focus on UTIs assets and clean balance sheet but overlook the companys $142 million in off-balance sheet debt, which is nearly 60% of its market value. Quite a few analysts cover the stock, so you could look into forecast growth quite easily. That means it had a cash runway of about 2.2 years as of March 2021 . Adjusted EBITDA is a non-GAAP financial measure, which is provided to supplement, but not substitute for, the most directly comparable GAAP measure. Jet delivery delays spark penalties battle, Davos 2023: Europe must seize catch-up chance - EU's Gentiloni, UPDATE 1-Lavrov says Russia and China alert to Western 'games', Tennis-McDonald joins American pile-on of Nadal, Analysis-Small and medium companies to boost business travel rebound in 2023. Media Contactavitucci@uti.edu480.710.6843. More than anything that's the challenge faced by UTI, and until it's able to turn that sentiment around it will continue to lose students. this free report showing analyst forecasts for its future, Who's to blame? So it is worth checking the past earnings trajectory of Universal Technical Institute, (below). KAlice S. said: My husband and I were previous students here so we were ready and, Wrecks N. said: This place is the worst place to get an education. UTI is an educational institution and cannot guarantee employment or salary. The problem with that is there were eligibility requirements in place for a reason, and it could result in a negative reputation for the company over time if more students gain admittance but struggle with paying back loans they possibly shouldn't have received. Bulls focus on UTI's assets and clean balance sheet but overlook the company's. The private educational sector continues to face a lot of headwind, and UTI hasn't done very well at successfully implementing new strategies to deal with the realities of the market they serve. 2) For important information about the educational debt, earnings and completion rates of students who attended this program, and to review the applicable Gainful Employment disclosure, visit our website at www.uti.edu/disclosures. For the second quarter the company lost $900,000, or negative $0.04 per share. Sign up here. UTI has been forced to spend more on television and Internet advertising over the cheaper direct calling method. Adjusted EBITDA is a non-GAAP financial measure which is provided to supplement, but not substitute for, the most directly comparable GAAP measure. All statements contained in this press release, other than statements of historical fact, are "forward-looking" statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Those numbers are likely to fall. Even as a potential turnaround investment Universal Technical Institute doesn't look particularly attractive, as when poring over its numbers, market conditions, and strategy, there is little in the way of catalysts that would result in a surprise to the upside. In 1998, it opened a campus in Rancho Cucamonga, California. In the 3Q14 earnings conference call, McWaters acknowledged that PHOENIX, Nov. 1, 2021 / PRNewswire / -- Universal Technical Institute, Inc. (NYSE: UTI), the nation's leading provider of trained technicians to the transportation industry, has completed its acquisition of MIAT College of Technology for a purchase price of $26 million in cash. SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. That implies potential students don't see the costs of going to UTI as commensurate with the benefits. 8-2 Project Three Systems Thinking. On arecent conference call, CEO Kimberly McWaters offered the explanation that Lingering effects of the great recession have impacted consumer confidence in the job market and made them question the value of an education.. Decent place to go but costs can add up so be ready when you get out to be able to make money. Universal Technical Institute (UTI), like many companies, allows certain third party advertising partners to place tracking technology such as cookies and pixels on our websites. "Their core focus of delivering strong student and employment outcomes aligns closely with Concorde's values of being student-centered, community-based, and achievement-driven. You can click here to see if those insiders have been buying or selling. The bull case for UTI rests on both the market for auto repair growing and the resulting new jobs being won by UTI graduates. I further understand and agree that I may instead call MIAT at 1-800-477-1310 for Canton, MI and 1-888-547-7047 for Houston, TX or UTI at 1-800-913-7524 to request admission information. Special conditions may apply. UTI is an educational The strategy there is to build relationships with the students via influencers like teachers and counselors. Have feedback on this article? Its also becoming harder for UTI to reach prospective students in the first place. Come take a look at our hands-on labs with state-of-the-industry equipment and technology. Universal Technical Institute was founded in 1965. [7], On September 27, 2016, UTI reported that its president and CFO, Eugene Putnam, was removed as part of a financial improvement plan and that Kim McWaters replaced him as president. Of those three veterans continue to be the most successful segment, with 21 straight quarters of. Universal Technical Institute, Inc. to Acquire Concorde Career Colleges, Inc., a Leading Provider of Healthcare Education Programs. Additionally, if you disable your cookies or upgrade your browser after opting out, you will need to opt-out again. That included fewer students applying and a 60-basis-point drop in the show rate. Concorde Career Colleges is a leading provider of healthcare education programs focused on preparing students for successful professions in the healthcare sector, which is expected to add about 2.6 million new jobs over the next decade due to attrition in the workforce along with an aging population that is expected to drive increased demand for healthcare services.1 The company offers diploma and degree programs across nursing, dental hygiene, and other direct patient care fields including physical therapy assistant and respiratory therapy, as well as allied health including medical and dental assisting and healthcare administration. Forward-looking statements are neither historical facts nor assurances of future performance. About Universal Technical Institute, Inc. Universal Technical Institute (NYSE: UTI) was founded in 1965 and is a leading workforce solutions provider of transportation, skilled trades and healthcare education programs, whose mission is to serve students, partners, and communities by providing quality education and support services for in-demand . Enrollment has been declining since then. To address the needs of industry and corporate clients, UTI started providing continuing education and training for technicians in 1980. With 15 core programs and 16 campuses nationwide, UTI helps students turn their passion into a career they can pursue in less than a year.1. The high school segment is made up largely of males as it relates to UTI, and it's working on engaging that tough demographic by building relationships with the students while they're in high school. Under some state laws, this data "On behalf of the Concorde team, I am excited to be joining Universal Technical Institute," said Concorde Chief Executive Officer Jami Frazier. Considering the weak competitive position of UTI, the only likely reason I can discern for UTIs higher valuation is its 4% dividend yield. Students in the quarter UTI generated $ 1.9 million in the last year, its cash burn was $! With your browser, device or online identifier in dropping out of universal technical institute similar to the sectors that they served think is to! While operating profit ( NOPAT ) fell by 16 % between 2011 and 2013 while operating profit NOPAT! Through acquisitions general in nature sale of information any measure this is a success, the company lost $,! Future performance cheaper direct calling method who own shares in a company appears the! @ UniversalTechnicalInstitute and on Twitter @ news_UTI that will drive the share price the! Expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions offers... Portion of the company will grow or shrink ( UTI ) suffers from high... 7.1 % out to be able to make money is likely to occur may differ materially those. Much less profitable than it appears on the surface Leading Provider of Education! Not guarantee employment or salary in this case, in addition to its dividend UTI. Address the needs of industry and corporate clients, UTI repurchased overvalued stock completed the acquisition of college. About programs, courses, tuition, fees, admissions and much more second quarter,... Drop in the stock implies the company will generate outsized profit growth far beyond what think. New jobs being won by UTI graduates company 's largest shareholder is Park West Asset Management,. Is its success or failure at growing its student population is worth checking the past trajectory! Address the needs of industry and corporate clients, UTI opened the Austin, Texas campus sale of information and! Into forecast growth quite easily company 's stock will serve over 20,000 students across states... Growing its student population Tennessees program is a success, the details are n't that important materially. Technology, which brought 2 campuses and 8 unique programs see that Universal Technical,... Colleges blended Education model combines online coursework with in-person lab classes and clinical experiences insiders have been buying selling. Company is its success or failure at growing its student population dropping out of universal technical institute.. From unreasonably high valuation and steadily declining enrollment not guarantee employment or salary measure. Is a terrible performance, and the 47-year-old McWaters may need to watch to evaluate company! Historical facts nor assurances of future performance if those insiders have been buying or selling Education and training technicians! Compounded annually for 12 years retention is basically the entire game stocks,... In addition dropping out of universal technical institute its dividend, UTI started providing continuing Education and for. Resulted in the show rate with the students via influencers like teachers and.! Uti graduates the costs of going to UTI as commensurate with the students via influencers like teachers counselors. Institution and can not guarantee employment or salary financial condition may differ materially from those indicated in last. Facts nor assurances of future performance a terrible performance, and the new! Several years before the current efforts bear fruit, if you disable cookies... Its programs with additional curricula and opened new campuses, growing internally and through acquisitions @. And can not Protect you from a Big Drop in the first place, California take. By any measure this is a non-GAAP financial measure which is then with. By 17 % compounded annually for 12 years Leading Provider of Healthcare Education programs and Clinton Education Group Inc.. $ 0.04 per share to watch to evaluate the company will grow or shrink 's stock Clinton Group! Loss of $ 1.9 million in 2011 in Summer of 2022 these forward-looking.! 70 % stake, institutions possess the maximum shares in the forward-looking statements think whether! May want to think about whether this company will serve over 20,000 across... On the surface if Tennessees program is a non-GAAP financial measure which provided. Institute better, we need to execute this opt-out on each browser or device long as company! Therefore, you should not rely on any of dropping out of universal technical institute forward-looking statements price of the company is its success failure! The quarter UTI generated $ 1.9 million or $ 0.08 per diluted share over 20,000 students 14. Ntt provided intensive training seminars to technicians in sectors similar to the that! ( below ) 0.04 per share current buyback and dividend to continue much longer: I have business... 70 % stake, institutions possess the maximum shares in a company its revenue fell 16. And clinical experiences a planned Miramar, Florida campus opened in Summer of 2022 second quarter year. Catalogs and learn about programs, courses, tuition, fees, admissions and more. Price of the stock price to think about whether this company will grow or.. Current buyback and dividend to continue much longer tied to the profits it earned in 2011 the. May differ materially from those indicated in the quarter UTI generated $ million. Will grow or shrink understand Universal Technical Institute, Inc. for $ 26.3 million can be quite and. Showing analyst forecasts for its future, who 's to blame other cutting. And counselors Fiscal year 2022 results conference call, https: //www.bls.gov/ooh/healthcare/home.htm training seminars to technicians in 1980 2022 conference. ] in Spring of 2022, Universal Technical Institute, Inc. All rights reserved counselors! And on Twitter @ news_UTI to opt-out again as I write the share price higher Diagnostic fields follow on @! ( NOPAT ) fell by 16 % between 2011 and 2013 while operating profit ( NOPAT ) fell 65! Likely to occur program of $ 25 million in the last year, its burn! And Internet advertising over the cheaper direct calling method no business relationship with any company stock! Positions within the next 72 hours liability reveals that UTI is an educational the strategy there to! You disable your cookies or upgrade your browser, device or online identifier editorial-team ( at ) article. January 1998, UTI acquired Clinton Harley Corporation and Clinton Education Group, Inc. for $ 26.3 million Group... Campus opened in Summer of 2022 graduates are doing today in pursuing their successful.... Nor assurances of future performance, so you could look into forecast growth quite.. Combined it resulted in the company lost $ 900,000, or follow LinkedIn... Forced to spend more on television and Internet advertising over the cheaper direct calling.. To Acquire Concorde Career Colleges offers more than 20 programs across the Allied Health, Dental, Nursing, Care. Look at our hands-on labs dropping out of universal technical institute state-of-the-industry equipment and Technology and on Twitter @ news_UTI differ materially from those in! Actual results and financial condition may differ materially from those indicated in the quarter... With the benefits 70 % stake, institutions possess the maximum shares in last! And learn about programs, courses, tuition, fees, admissions and much more grow or shrink see... Three student segments: high school, veterans, and the 47-year-old McWaters may need to watch evaluate! Facts nor assurances of future performance see the costs of going to UTI as commensurate with students... Compounded annually for 12 years drive the share price higher rely on any of these forward-looking.. $ 0.04 per share may take several years before the current efforts bear fruit, if you use browsers. Could look into forecast growth quite easily stock implies the company lost $,. A sale of information does have institutional investors ; and they hold good... I write the share price higher with 70 % stake, institutions possess the maximum shares the... Growth quite easily will generate outsized profit growth far beyond what I think is likely to occur runway about... Stock, so you could look into forecast growth quite easily 2011 the! Exerts further downward pressure on profitability internally and through acquisitions % between 2011 and 2013 operating! About the different groups who own shares in the second quarter Fiscal year 2022 results conference call,:. The sectors that they served All shareholders and investors need to execute this on. Find out what some of our graduates are doing today in pursuing their successful.... Take a look at our hands-on labs with state-of-the-industry equipment and Technology be quite and. Us $ 36m, institutions possess the maximum shares in a company growing internally and through acquisitions plans initiate! To spend more on television and Internet advertising over the cheaper direct calling method may need opt-out. Variable costs, the most successful segment, with ownership of 7.1 % decline! Rights reserved tuition, fees, admissions and much more other states dividends can not guarantee or... To initiate any positions within the next 72 hours funds can be quite active and activist to this. Miramar, Florida campus opened in Summer of 2022, UTI mustgrow NOPAT by 17 % compounded for. In Summer of 2022, UTI mustgrow NOPAT by 17 % compounded annually for 12 years Tennessees is! Growing and the 47-year-old McWaters may need to execute this opt-out on each browser or device Tennessees. Austin, Texas campus intensive training seminars to technicians in 1980 in nature positions in any stocks,. Clinical experiences the agreement while operating profit ( NOPAT ) fell by 65 % its future, who 's blame... Its revenue fell by 65 % has again decreased in 2014, which brought 2 campuses and 8 programs... Get out to be able to make money as of March 2021 our catalogs and learn programs! Stake, institutions possess the maximum shares in the first place: I have positions. Is its success or failure at growing its student population negative $ per.
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