PERDOCEO EDUCATION CORP (NASDAQ:PRDO) – An Undervalued Stock with Strong Fundamentals

PERDOCEO EDUCATION CORP (NASDAQ:PRDO) stands out as an undervalued stock with solid financial health and profitability. The company, which operates in the education sector through institutions like Colorado Technical University and American InterContinental University, has been flagged by our "Decent Value" screener for its attractive valuation and stable fundamentals.

Key Strengths

Valuation (Rating: 8/10)

• PRDO trades at a P/E ratio of 13.29, significantly below the industry average of 26.49 and the S&P 500 average of 26.59.
• Its Price/Forward Earnings ratio of 11.98 is also lower than most peers, suggesting room for upside.
• The Enterprise Value to EBITDA and Price/Free Cash Flow ratios indicate the stock is priced attractively compared to competitors.

Financial Health (Rating: 8/10)

• A strong Altman-Z score of 6.43 signals low bankruptcy risk.
• Minimal debt with a Debt/Equity ratio of 0.01, well below industry norms.
• Excellent liquidity metrics, including a Current Ratio of 4.46 and Quick Ratio of 4.43, ensuring short-term obligations are easily covered.

Profitability (Rating: 8/10)

• High Profit Margin (20.91%) and Operating Margin (25.14%), outperforming over 90% of industry peers.
• Strong Return on Assets (11.97%) and Return on Invested Capital (12.29%), reflecting efficient capital use.

Growth (Rating: 5/10)

• EPS growth of 12.74% over the past year and a 10.19% annualized growth rate over five years.
• Revenue is expected to grow by 14% annually in the coming years, signaling improving demand.

Why It’s Worth Watching

PRDO combines a low valuation with strong profitability and financial stability, making it a candidate for value investors. While growth has been modest, improving revenue projections and efficient operations suggest potential upside.

For a deeper look, review the full fundamental report on PRDO.

Our Decent Value screener lists more stocks with similar characteristics and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.