Perdoceo Soars on Acquisitions and Enrollment Surge—Is This Education Stock a Buy?
15min read Investors, let’s cut to the chase: perdoceo education corporation just delivered a Q1 2025 earnings report that’s blowing the doors off expectations. Revenue surged 26.6% to $213 million, earnings per share hit $0.70 (a 12.9% beat!), and the stock jumped 2.5% after hours. This isn’t just a good quarter—it’s a sign that Perdoceo’s bet on acquisitions and tech-driven education is paying off. But here’s the question: Is this stock worth buying now?
The Numbers That Should Grab Your Attention
Perdoceo’s top-line growth is the star here. The $213 million in revenue crushed analyst estimates of $175 million, thanks to two key drivers:
1. The University of St. Augustine for Health Sciences (USAHS) acquisition, which contributed $39.18 million in revenue and 4,200 students.
2. Colorado Technical University (CTU), whose revenue rose 5.3% to $119.58 million.
Even AIUS, the underperformer, only dipped 0.8%—a minor stumble in an otherwise stellar quarter. But here’s the kicker: operating income hit $51.7 million, up 11.8% year-over-year. And let’s not forget the adjusted EPS of $0.70, which is up 16.7% from last year. This isn’t a flash in the pan—it’s execution.
Enrollment Growth: The Engine of Future Profits
Perdoceo’s student numbers are booming. Total enrollments jumped 16.7% to 48,200 students, with CTU up 10.6% and USAHS adding 4,200 learners. CEO Todd Nelson emphasized “historically high retention rates”, thanks to tech like the intellipath® platform, which personalizes learning.
This isn’t just about numbers—it’s about student satisfaction. Higher retention means repeat revenue, and Perdoceo’s 83.5% gross profit margin shows they’re monetizing it effectively.
The Balance Sheet Looks Bulletproof (For Now)
Perdoceo ended Q1 with $612.2 million in cash, up from $591.5 million at year-end. Operating cash flow jumped 19.5% to $65.1 million, proving the business can fund itself. But here’s the move that really caught my eye:
- Share buybacks: They spent $25.2 million to buy back 999,000 shares, leaving $21.9 million left under their program.
- Dividends: A $0.13 quarterly payout, with management calling dividends a “growing part of capital strategy.”
This is a company that’s returning cash to shareholders while investing in growth. And with an 83.5% gross margin, they’ve got the room to do both.
The Risks? Don’t Let Them Scare You Off… Yet
Perdoceo isn’t without headwinds. The FTC is still investigating them (though they’ve already set aside $10 million in reserves), and federal funding for education remains uncertain. Plus, USAHS’s $0.33 million operating loss shows integration costs are still a hurdle.
But here’s why I’m not panicking:
- Adjusted metrics (which exclude one-time costs) are soaring. Adjusted operating income jumped 28.9% to $63.5 million.
- Management’s full-year 2025 guidance calls for adjusted EPS of $2.40–$2.56**, a 14–19% increase from 2024.
The Bottom Line: Buy the Dip, but Keep an Eye on Regulation
Perdoceo’s Q1 results are a slam dunk. They’re growing revenue, expanding enrollments, and returning cash to shareholders—all while maintaining a fortress balance sheet. The stock’s after-hours pop is just the start.
Buy if…
- You believe in the long-term demand for health sciences and tech education.
- The FTC settlement doesn’t derail the stock.
- The company can sustain its 16% enrollment growth rate.
Wait if…
- Federal funding for education gets slashed.
- The FTC imposes harsher penalties than expected.
Right now, the adjusted EPS growth of 12.9% and 26.6% revenue gains make Perdoceo a compelling buy. But remember: In this sector, regulation is a wildcard. Still, with a “GREAT” financial health score of 3.18/5 and a stock price that’s primed to rise, this could be a 2025 winner.
Action Alert: If PERD dips below $25, this is a buy. If it hits $30, consider taking some profits—but don’t walk away entirely. This isn’t a fad—it’s a strategic play.
Final Take: Perdoceo is executing its growth strategy flawlessly. While risks linger, the numbers are too strong to ignore. This is a stock to own in an education sector that’s finally starting to shine.
