ADTALEM GLOBAL EDUCATION INC (NYSE:ATGE) – An Undervalued Stock with Strong Fundamentals

ADTALEM GLOBAL EDUCATION INC (NYSE:ATGE) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company combines solid growth, profitability, and financial health with an attractive valuation. Below, we examine why ATGE stands out based on its fundamental metrics.

Valuation

ATGE scores a 7 out of 10 on valuation, indicating it is priced reasonably compared to its fundamentals. Key points include:

• Price/Earnings (P/E) Ratio: At 19.26, ATGE trades below the industry average (26.42) and the S&P 500 average (27.45).
• Forward P/E: 16.17 suggests the stock is fairly valued relative to future earnings expectations.
• Price/Free Cash Flow: The company is priced cheaper than 83% of its peers, reinforcing its undervaluation.
• PEG Ratio: A low PEG ratio suggests the stock is reasonably priced relative to its expected earnings growth.

Growth

With a growth rating of 8, ATGE demonstrates strong expansion:

• Earnings Growth: EPS grew 36.25% over the past year, with a 5-year annualized growth rate of 12.11%.
• Revenue Growth: Increased 13.10% in the last year, with a 9.34% average annual growth rate.
• Future Expectations: Analysts project EPS growth of 20.13% annually, indicating continued momentum.

Profitability

ATGE earns a profitability score of 7, supported by:

• Return on Equity (ROE): 16.21%, outperforming 80% of industry peers.
• Operating Margin: 19.55%, ranking in the top 15% of its sector.
• Profit Margin: 13.34%, above 84% of competitors.

Financial Health

The company’s financial health rating of 6 reflects stability with some minor concerns:

• Low Debt: A Debt/Equity ratio of 0.39 indicates manageable leverage.
• Solvency: Strong Altman-Z score (4.31) suggests low bankruptcy risk.
• Liquidity Weakness: A current ratio of 0.83 may raise short-term liquidity concerns, though long-term solvency remains solid.

For a deeper analysis, review the full fundamental report for ATGE.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.