By submitting this form, I agree that MIAT College of Technology, Universal Technical Institute, Inc., Custom Training Group, Inc. and their representatives may email, call, and / or text me with marketing messages about educational programs and services, as well as for school-related communications, at any phone number I provide, including a wireless number, using prerecorded calls or automated technology. UTI is making more than $15 million in scholarships and grants available to students in 2022. That said, the strategy of UTI is to cut advertising expenses while increasing inquiry volume. click here to see if those insiders have been buying or selling. Even though UTIs stock price is down 50% over the past five years, the company remains significantly overvalued. SOURCE Universal Technical Institute, Inc. Download our catalogs and learn about programs, courses, tuition, fees, admissions and much more. In that regard UTI is easy to understand and measure, and it's best to ignore all the talk of strategies and models and look at the bottom line: is the student population growing or not? I dont see any significant positive catalyst on the horizon that can reverse this downward trend. Given the changing regulatory landscape and revenue decline in addition to UTIs mountain of off-balance sheet debt, it seems more likely that this company will go out of business than be bought out. Divided Government And The Way Forward For The Markets, How Negativity Bias Leads To Mistakes In Portfolios, Transforming The Wealth Management Experience For Todays Client, MoneyStamps Of South America - As Investments, Theyre Different Part 1, Covid-19 Related Municipal Defaults Begin, The Dynamics Of Price Discovery In The Stamp Market, limit the amount of debt that students can take on in career-training programs, grow NOPAT by 17% compounded annually for 12 years. "This transaction marks a major milestone in executing our strategy as we expand the scope of our skilled education programs to serve students' varied workforce-training needs and drive growth for the company. Universal Technical Institute's campuses are accredited by the Accrediting Commission of Career Schools and Colleges (ACCSC), while its employer-aligned technical training programs are offered under four brands:Universal Technical Institute, Motorcycle Mechanics Institute / Marine Mechanics Institute, NASCAR Technical Institute, and MIAT College of Technology. Take 60 seconds and find out how you can get trained. Even if for-profit universities can shed their current stigma and demand for automotive education improves, the industry landscape is changing. Under some state laws, this data To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. We aim to bring you long-term focused analysis driven by fundamental data. It looks like hedge funds own 14% of Universal Technical Institute shares. This scenario assumes a consistent level of profitability as the company achieved over the past two years, as UTI would continue to earn its current 6% return on invested capital (ROIC). Student-Paid vs. Manufacturer-Paid Programs. 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. Now is an exciting time to pursue a career in the industry, as new vehicle technology and high-tech systems are now considered standard equipment. Is this happening to you frequently? Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. 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. I understand that my consent is not required to apply, enroll or make any purchase. So they usually pay more attention to companies that are included in major indices. 1Source: U.S. Bureau of Labor Statistics, https://www.bls.gov/ooh/healthcare/home.htm, viewed May 2, 2022.2 Encompasses 12 UTI campuses, 2 MIAT campuses, and 17 Concorde campuses post-close. To that end the company hasn't done too badly, as it has been able to cut advertising costs by 8 percent while boosting the number of people checking out what the school has to offer. Note that UTI scores second lowest in profit margins, profit growth, and is the most highly valued company on the list. Privacy Policy For further details on how we use your data, please review UTI's Privacy Policy. 47) The U.S. Bureau of Labor Statistics projects that total national employment for Automotive Service Technicians and Mechanics will be 743,800 by 2031. UTI is an educational institution and cannot guarantee employment or salary. UTI has among the worst in the industry. [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. Net Price $21,726 / year National $15,523 Average cost after financial aid for students receiving grant or scholarship aid, as reported by the college. It offers diploma, undergraduate degree, and certificate programs. In 1983, UTI opened a campus in Houston, Texas. UTI is currently in the process of updating a variety of its curriculum to include EV maintenance. There was an operating loss of $1.9 million for the quarter compared to operating income of $3 million in the same period last year. 1) UTI cannot guarantee employment or salary. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. UTI is an educational institution and cannot guarantee employment or salary. Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Our data reflects individual insiders, capturing board members at the very least. Last year in the quarter UTI generated $1.9 million or $0.08 per diluted share. EBITDA stood at $4.2 million in comparison to $89.5 million in 2012 in the second quarter. 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. This rate excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. Universal Technical Institute defines estimated adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue. This data contradicts McWaters explanation for the companys recent underperformance. As a result, the company is likely to default on the promises implied by the stocks lofty valuation. Any forward-looking statements made by UTI in this press release are based only on information currently available to UTI and speak only as of the date on which it is made. The ongoing high fixed costs, which can't be managed, is what makes UTI such a risk to own if investors want any type of growth. 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. Of those three veterans continue to be the most successful segment, with 21 straight quarters of application growth. PHOENIX, May 3, 2022 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), a leading provider of transportation and technical training programs, has entered into a definitive. 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. That implies potential students don't see the costs of going to UTI as commensurate with the benefits. Talk to potential employers to learn more about the programs available in your area. 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. [2], In January 1998, UTI acquired Clinton Harley Corporation and Clinton Education Group, Inc. for $26.3 million. We choose to disclose this non-GAAP financial measure for Concorde because it provides an additional performance measure. The current price of the stock implies the company will generate outsized profit growth far beyond what I think is likely to occur. You can click here to see if those insiders have been buying or selling. Universal Technical Institute (UTI) suffers from unreasonably high valuation and steadily declining enrollment. [20] In Spring of 2022, UTI opened the Austin, Texas campus. UTI is an educational UTI's actual results and financial condition may differ materially from those indicated in the forward-looking statements. AboutUniversal 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 careers across a number of highly-skilled fields. Grant to Succeed Kimberly J. McWaters as Chief Executive Officer", "Universal Technical Institute Completes Acquisition of MIAT College of Technology", https://www.bizjournals.com/phoenix/news/2021/11/05/phoenix-school-back-in-growth-mode.html, "Universal Technical Institute Will Add 15 New Programs in Transportation and Skilled Trades Across Its National UTI/MIAT Campus Footprint", "UTI Adding New Automotive, Skilled Trade Programs | THE SHOP", "Universal Technical Institute Expands Platform of Workforce Solutions Offerings with Completion of Concorde Career Colleges, Inc. Acquisition", "Universal Technical Institute, Inc. to Acquire Concorde Career Colleges, Inc., a Leading Provider of Healthcare Education Programs", "Universal Technical Institute plans $50M acquisition of Concorde Career Colleges", "Ford to collaborate with Universal Technical Institute on EV training curriculum", "Universal Technical Institute Selects Bosch to Develop New Courseware Supporting its Electric Vehicle Training Strategy", https://www.bizjournals.com/phoenix/news/2018/02/08/uti-stock-up-while-stemming-losses-as-enrollment.html, "Universal Technical Institute Celebrates Opening of Austin Campus", "Universal Technical Institute Selects Miami Metropolitan Area As The Location For The Second New Campus It Plans To Open In 2022", https://en.wikipedia.org/w/index.php?title=Universal_Technical_Institute&oldid=1133240788, This page was last edited on 12 January 2023, at 21:12. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Investors impressed by UTIs job placement rates need also to look at the quality of the jobs the graduates are getting. In the 3Q14 earnings conference call, McWaters acknowledged that The fall in revenue was directly tied to the decline in students attending the school. Terms of the transaction have been disclosed in Universal Technical Institute's Form 8-K and completion of the acquisition will occur pending customary closing conditions and regulatory approvals. Most Programs Take Less Than a Year. The problem with this strategy is that demand for UTIs education appears to be highly elastic. out by completing and submitting the form below. A drop to the mid-to-high single digits for new student starts is the reasoning there. Find out what some of our graduates are doing today in pursuing their successful careers. That level of sustained growth seems unlikely given the many problems facing UTIs industry. [3], The 2012 Harkin Commission noted that: "Compared to public colleges offering the same programs, the price of tuition is significantly higher at UTI.The same Certificate costs almost 20 times more at UTI than it does at the public college." Figure 2: Overvalued and Underperforming in a Struggling Industry, Competition from Free Alternatives Is A Killer. Concorde Career Colleges offers more than 20 programs across the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. [4], While Universal Technical Institute in the past had limited access to military bases for student recruitment, as of 2021 it operates BMW MSTEP at Ft. Bragg, N.C.[5] and Marine Corps Base Camp Pendleton, Calif.,[6] and Premier Truck Group Technician Training at Ft. Bliss in Texas. Of those three veterans continue to be the most successful segment, with 21 straight quarters of. That's unlikely to happen, and there's little in the way of it continuing its free fall; although a new CEO would probably give the company a temporary boost, and if the right person, may even help to generate sustainable growth for the company. For those that are open to it, it is difficult for many to obtain the student financing needed to go to school. [2], In June 1998, UTI acquired National Technology Transfer, Inc. (NTT) and Performance Training Associates (PTA). 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. Universal Technical Institute, Inc. (UTI). That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). The firm said it grew adult applications by 10 percent (year-over-year) in April, and while cautious in outlook because of it being only one month, it is the first time in a long time since adult student applications increased. Jerome Grant, chief executive officer, and Troy Anderson, chief financial officer, will . The most recent data shows that average enrollment has again decreased in 2014, which exerts further downward pressure on profitability. With negative free cash flow to price of $-0.49 per share, it's hard to see how UTI expects to grow in the future. Some UTI graduates get jobs within their field of study in positions other than as a technician, such as: parts associate, service writer, fabricator, paint and paint prep, and shop owner/operator. SeeTable 1.10 Occupational separations and openings, projected 2021-31, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. I only included this strategy segment to show the company is taking steps in that direction, and waiting to see the enrollment numbers is all that will matter. SOURCE Universal Technical Institute, Inc. Concorde Career Colleges, Inc. ("Concorde"), 2022 full year and fourth quarter earnings call on, https://www.prnewswire.com/news-releases/universal-technical-institute-expands-platform-of-workforce-solutions-offerings-with-completion-of-concorde-career-colleges-inc-acquisition-301692062.html, Stock market news live updates: Stock futures stagnant as earnings season picks up, Who's to blame? 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. Investors should not expect the companys current buyback and dividend to continue much longer. 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. Universal Technical Institute will support Concorde's existing efforts to expand the healthcare opportunities for students and alumni, including adding new programs (pending regulatory approval), growing existing online offerings, and optimizing the current campus locations to enhance the opportunity for past, current and future students to increase their skills. At Universal Technical Institute of Illinois Inc., the graduation rate for American Indian or Alaska Native students is 100.00%, for Asian students it is 75.00%, for Black (non-Hispanic) students it is 33.33%, for Hispanic students it is 56.73%, for White students it is 62.01%, for Two or More Races it is . The economy was in worse shape in 2010 than it is now, but during that year UTI had its highest enrollment and profits of the past decade. 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. On the state level, Tennessee recently made waves bymaking two-year community colleges freeto all high school graduates. Media [email protected]. Sam McBride and Andr Rouillard contributed to this report. 7) Some programs may require longer than one year to complete. A more reasonable scenario of6% NOPAT growth for 10 yearsyields a fair value of just $3.75/share 60% downside. [9] Jerome Grant was named CEO in 2019.[10]. In the last year, its cash burn was US$36m. Universal Technical Institute will post an updated presentationregarding its growth and diversification strategy on its investor relations website. 4 out of 5 UTI graduates find employment in careers within their field of study within 1 year of graduation. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of UTI's control. Search trends for automotive education are down 10% year-over-year. The fall in revenue was directly tied to the decline in students attending the school. Additionally, Universal Technical Institute is opening new campuses in Miramar, Florida., and Austin, Texas and is further expanding its welding programs to 2 additional locations during the fiscal year. Perhaps investors are overlooking the fundamental problems in the business due to the steady cash payments from the company. "The acquisition of Concorde Career Colleges will be a significant next step in our previously announced growth and diversification strategy," said Universal Technical Institute CEO Jerome Grant. Jami Frazier will serve as the Divisional President, reporting to CEO Jerome Grant. Its revenue fell by 16% between 2011 and 2013 while operating profit (NOPAT) fell by 65%. Job openings include openings due to net employment changes and net replacements. Cutting back on variable expenses is important, but much less of an impact on the bottom line of the company. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future. 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. "The $50 million purchase price provides a compelling enterprise value to adjusted EBITDA multiple and an opportunity to significantly increase our shareholder value. The schools operated by Concorde Career Colleges are accredited by either the Accrediting Commission of Career Schools and Colleges (ACCSC) or the Council on Occupational Education (COE). SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. The numbers dont support this story. 14) Incentive programs and employee eligibility are at the discretion of the employer and available at select locations. Take an interactive 360 virtual tour by clicking on any of the program links below. 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. Yet increasing inquiries at least gives the school an opportunity to convert inquiries into students. 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