On Thursday, B.Riley increased the price target for Universal Technical Institute (NYSE: NYSE:UTI) to $22 from $20, while maintaining a Buy rating on the stock. The firm highlights Universal Technical Institute's positive trajectory, citing its enrollment trends, revenue, and EBITDA growth. The optimism follows management's confirmation at the B. Riley 24th Annual Institutional Investor Conference held last week.
Universal Technical Institute's business model has recently been enhanced through strategic acquisitions and the introduction of new campuses and programs, according to the analyst's observations. These moves have diversified UTI's offerings and contributed to its robust enrollment numbers. The institute's adoption of a hybrid model has also been beneficial, increasing capacity and improving margins.
The analyst pointed out that UTI's growth does not hinge on further acquisitions or the launch of additional campuses. The current business strategy is expected to drive revenues from $607 million in FY23 to an estimated $725 million in FY24 and potentially $805 million in FY25. EBITDA and cash flow are also projected to grow significantly, with over 60% year-over-year growth in FY24.
Management's reaffirmed guidance for the fiscal year suggests strong confidence in the institute's ability to meet its financial targets. The analyst noted that UTI's diverse program offerings, including 15 new programs and three new campuses introduced in FY23, are key factors in this growth. Additionally, the demand for technicians in various industries, including healthcare, is expected to continue driving student interest and enrollment.
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