Universal Technical Institute (NYSE:UTI) Reports Strong Q4, Stock Soars

Universal Technical Institute (NYSE:UTI) has reported a robust fourth quarter, with revenue and earnings surpassing analyst estimates, leading to a significant surge in its stock price. The company's strong performance was driven by increased enrollment, program expansion, and corporate partnerships, setting the stage for continued growth in the coming years.

In the fourth quarter of 2024, UTI reported revenue of $201.4 million, a 15.3% year-on-year growth, and a 3.9% beat over analyst estimates of $193.9 million. The company's earnings per share (EPS) (GAAP) of $0.40 was a substantial beat over analyst estimates of $0.18, while adjusted EBITDA margins reached 17.6% with a 39.1% beat over estimates of $25.53 million. The company's operating margin improved to 13.6% from 8.1% in the same quarter last year, and its free cash flow margin increased to 9.7% from 4% in the same quarter last year.

UTI's strong performance was driven by several key factors:

1. Increased Enrollment: The company reported a 19% year-over-year increase in new student starts, reaching 26,885 students. This growth was driven by both the UTI and Concorde divisions, with UTI contributing 15,138 and Concorde contributing 11,747 students. This increase in enrollment directly contributed to the revenue growth, as more students mean more tuition revenue.
2. Program Expansion: UTI expanded its program offerings, including the launch of new skilled trades programs and the addition of new campuses. This diversification of revenue streams contributed to the overall revenue growth. For instance, the addition of new skilled trades programs like welding, CNC machining, HVAC repair, robotics, and automation, as well as energy technology and wind power programs, attracted more students and increased revenue.
3. Corporate Partnerships: UTI's strong industry partnerships, particularly with major automotive manufacturers and employers, continue to drive high-margin revenue. These partnerships allow UTI to offer Manufacturer-Specific Advanced Training (MSAT) programs, which are highly valued by employers and attract more students, leading to increased revenue.

Based on its strong fourth-quarter performance, UTI has raised its guidance for the full year 2025 to $815 million in revenue, $124 million in EBITDA, and $1 at EPS. This guidance compares favorably to analyst estimates, indicating the company's confidence in its strategic initiatives and market position.

In conclusion, Universal Technical Institute's strong fourth-quarter performance, driven by increased enrollment, program expansion, and corporate partnerships, has positioned the company for continued growth in the coming years. With a raised guidance for the full year 2025 and a confident outlook, UTI is well-positioned to capitalize on the growing demand for skilled technicians in the transportation, skilled trades, and energy sectors.