Adtalem Global Education: A Picks-and-Shovels Play on the U.S. Healthcare Labor Crisis

The U.S. healthcare system faces a workforce crisis of unprecedented scale, with the Bureau of Labor Statistics projecting 2.7 million new healthcare jobs through 2032. Amid this demand, Adtalem Global Education (ATGE) has positioned itself as a critical supplier of trained professionals—akin to the “picks-and-shovels” providers of the healthcare gold rush. With its network of specialized institutions addressing shortages in nursing, medicine, and veterinary care, Adtalem is capitalizing on a structural shift in demand for healthcare education.

The Healthcare Labor Crisis: A Tailwind for Education Providers

The U.S. healthcare labor shortage is a multifaceted problem. Primary care physicians are increasingly scarce, especially in rural and underserved areas. Nursing vacancies have surged, with hospitals reporting 1 in 5 positions unfilled. Meanwhile, veterinary medicine faces its own crunch, with a growing pet population and rising demand for specialized care.

For Adtalem, this crisis is a growth catalyst. Its three core segments—medical/veterinary schools, nursing programs, and social-behavioral health education—are all aligned with these workforce gaps. Let’s break down how each is driving results:

1. Medical and Veterinary Education: Elite Residency Placement and Prestige

Adtalem’s Caribbean-based medical schools, including the American University of the Caribbean School of Medicine (AUC) and Ross University School of Medicine (RUSM), remain pillars of its portfolio. Despite modest enrollment growth (1.2% to 5,133 students), their graduates continue to outperform expectations:
- Residency Success: 95% of 2025 graduates secured first-time residency placements, a rate maintained for four straight years. Of these, 615 began training in 42 U.S. states, with over 40% in federally designated Medically Underserved Areas.
- Specialization: Ross University’s veterinary program set a record, with graduates securing top-tier internships in surgery and cardiology—a direct response to shortages in specialized care.

This reputation for placement success is non-negotiable in competitive medical education, and Adtalem’s schools have mastered it.

2. Nursing Dominance via Chamberlain University

Chamberlain’s enrollment surged 6.8% to 40,564 students in 2025, fueled by its online BSN program and strategic expansion of clinical hubs. Key metrics include:
- Geographic Reach: 53 clinical hubs now operate across 36 states, enabling hands-on training at hospitals like Johns Hopkins and Kaiser Permanente.
- Brand Power: The “You’ve Got This, We’ve Got You” campaign reinforced Chamberlain’s role as a support system for nurses—a critical selling point as burnout drives turnover.

3. Walden University: Competency-Based Upskilling for Healthcare Professionals

Walden’s enrollment jumped 13.5% to 48,526 students, with 60% of graduates entering healthcare or social-behavioral health roles. Its competency-based model—focused on real-world skills for working professionals—delivered a 18.5% revenue boost. Notably, 80% of its 2025 graduates pursued healthcare careers, directly feeding the labor pipeline.

Financial Resilience and Strategic Discipline

Adtalem’s Q3 results underscore its financial strength:
- Revenue: Up 12.9% to $466.1 million, with Nursing and Walden driving outsized gains.
- Profitability: Adjusted EPS rose 28% to $1.92, reflecting cost discipline and scale advantages.
- Capital Allocation: Despite a dip in Medical/Vet segment profitability (due to softer enrollment growth), Adtalem’s net leverage of 0.8x allowed it to repurchase $300 million in shares and authorize an additional $150 million through 2028.

Risks and Opportunities Ahead

The Medical/Vet segment’s operating income fell 21.8%, highlighting reliance on niche markets. However, its residency placement success and institutional prestige act as a moat. Meanwhile, Nursing and Walden’s momentum—driven by online accessibility and federal funding—appears sustainable.

Adtalem’s 2025 outlook is bullish:
- Revenue: $1.76–$1.775 billion (+11%–12% growth).
- EPS: $6.40–$6.60 (+28%–32% growth).

Conclusion: A Compelling Play on Healthcare’s Future

Adtalem Global Education is a clear beneficiary of the U.S. healthcare labor crisis. Its institutions—whether training doctors in underserved areas, nurses in high-demand specialties, or social workers in behavioral health—are directly addressing workforce gaps. With enrollment up 9.8% across all programs, financial discipline, and a stock repurchase plan signaling confidence, Adtalem is positioned to thrive as demand for healthcare workers remains insatiable.

The data is clear: Adtalem’s strategic focus on high-growth healthcare fields, combined with its operational execution, makes it a rare “picks-and-shovels” investment in an industry where supply can’t keep up with demand. For investors, this is a bet on a structural trend—one that won’t fade anytime soon.