Universal Technical Institute (NYSE:UTI) - Share price, News & Analysis

Q: What is the Fair Price of UTI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

UTI ($7.56) is trading below our estimate of [[fair value]] ($24)

UTI fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	4/6
Past Performance	2/6
Financial Health	3/6
Dividends	0/6

UTI Stock Overview

Universal Technical Institute, Inc. provides transportation and technical training programs in the United States.

Rewards

Trading at 68.5% below our estimate of its fair value

Earnings are forecast to grow 49.86% per year

Became profitable this year

Risk Analysis

High level of non-cash earnings

Significant insider selling over the past 3 months

Universal Technical Institute Competitors

Lincoln Educational Services

NasdaqGS:LINC

US$175.8m

American Public Education

NasdaqGS:APEI

US$296.2m

Hailiang Education Group

NasdaqGM:HLG

US$341.8m

Golden Sun Education Group

NasdaqCM:GSUN

US$511.0m

Price History & Performance

Summary of all time highs, changes and price drops for Universal Technical Institute
Historical stock prices
Current Share Price	US$7.56
52 Week High	US$11.45
52 Week Low	US$5.34
Beta	0.49
1 Month Change	-17.56%
3 Month Change	-16.92%
1 Year Change	17.39%
3 Year Change	105.43%
5 Year Change	110.00%
Change since IPO	-71.31%

Recent News & Updates

May 11

Is Universal Technical Institute (NYSE:UTI) A Risky Investment?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	UTI	US Consumer Services	US Market
7D	-2.8%	3.5%	6.3%
1Y	17.4%	-49.0%	-18.8%

Return vs Industry: UTI exceeded the US Consumer Services industry which returned -48.8% over the past year.

Return vs Market: UTI exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is UTI's price volatile compared to industry and market?
UTI volatility
UTI Average Weekly Movement	8.6%
Consumer Services Industry Average Movement	9.5%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: UTI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: UTI's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1965	1,660	Jerome Grant	https://www.uti.edu

Universal Technical Institute, Inc. provides transportation and technical training programs in the United States. The company provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle, and marine technicians. It also offers certificate, diploma, or degree programs under various brands, such as Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute, and NASCAR Technical Institute.

Universal Technical Institute Fundamentals Summary

How do Universal Technical Institute's earnings and revenue compare to its market cap?
UTI fundamental statistics
Market Cap	US$249.80m
Earnings (TTM)	US$20.71m
Revenue (TTM)	US$388.41m

12.1x

P/E Ratio

0.6x

P/S Ratio

Is UTI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
UTI income statement (TTM)
Revenue	US$388.41m
Cost of Revenue	US$149.94m
Gross Profit	US$238.47m
Other Expenses	US$217.76m
Earnings	US$20.71m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.63
Gross Margin	61.40%
Net Profit Margin	5.33%
Debt/Equity Ratio	22.9%

How did UTI perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is UTI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for UTI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for UTI. This is calculated by dividing UTI's market cap by their current preferred multiple.
What is UTI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$249.80m

UTI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.2x
Enterprise Value/EBITDA	9.4x
PEG Ratio	0.2x

Price to Earnings Ratio vs Peers

How does UTI's PE Ratio compare to its peers?

UTI PE Ratio vs Peers

The above table shows the PE ratio for UTI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	121.8x
LINC Lincoln Educational Services	7.7x	2.3%	US$175.8m
APEI American Public Education	19.8x	11.3%	US$296.2m
HLG Hailiang Education Group	4.7x	n/a	US$341.8m
GSUN Golden Sun Education Group	454.8x	n/a	US$511.0m
UTI Universal Technical Institute	12.1x	49.9%	US$249.8m

Forward PE

Price-To-Earnings vs Peers: UTI is good value based on its Price-To-Earnings Ratio (12.1x) compared to the peer average (121.8x).

Price to Earnings Ratio vs Industry

How does UTI's PE Ratio compare vs other companies in the US Consumer Services Industry?

Price-To-Earnings vs Industry: UTI is good value based on its Price-To-Earnings Ratio (12.1x) compared to the US Consumer Services industry average (19.5x)

Price to Earnings Ratio vs Fair Ratio

What is UTI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

UTI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.1x
Fair PE Ratio	24x

Price-To-Earnings vs Fair Ratio: UTI is good value based on its Price-To-Earnings Ratio (12.1x) compared to the estimated Fair Price-To-Earnings Ratio (24x).

Share Price vs Fair Value

What is the Fair Price of UTI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: UTI ($7.56) is trading below our estimate of fair value ($24)

Significantly Below Fair Value: UTI is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: UTI is good value based on its PEG Ratio (0.2x)

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Future Growth

How is Universal Technical Institute forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

49.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: UTI's forecast earnings growth (49.9% per year) is above the savings rate (1.9%).

Earnings vs Market: UTI's earnings (49.9% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: UTI's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: UTI's revenue (10.9% per year) is forecast to grow faster than the US market (8.4% per year).

High Growth Revenue: UTI's revenue (10.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if UTI's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Universal Technical Institute performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

48.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: UTI has a high level of non-cash earnings.

Growing Profit Margin: UTI became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: UTI has become profitable over the past 5 years, growing earnings by 48.8% per year.

Accelerating Growth: UTI has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: UTI has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Services industry (-10.4%).

Return on Equity

High ROE: UTI's Return on Equity (17.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Universal Technical Institute's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: UTI's short term assets ($109.5M) do not cover its short term liabilities ($118.4M).

Long Term Liabilities: UTI's short term assets ($109.5M) do not cover its long term liabilities ($188.3M).

Debt to Equity History and Analysis

Debt Level: UTI has more cash than its total debt.

Reducing Debt: UTI's debt to equity ratio has increased from 0% to 22.9% over the past 5 years.

Debt Coverage: UTI's debt is well covered by operating cash flow (99.4%).

Interest Coverage: UTI's interest payments on its debt are well covered by EBIT (33.1x coverage).

Balance Sheet

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Dividend

What is Universal Technical Institute current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate UTI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate UTI's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if UTI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if UTI's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: UTI is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as UTI has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure

CEO

Jerome Grant (58 yo)

2.58yrs

Tenure

US$2,215,714

Compensation

Mr. Jerome A. Grant has been Chief Executive Officer and Director of Universal Technical Institute, Inc. since November 1, 2019. Mr. Grant had been Chief Operating Officer and Executive Vice President at U...

CEO Compensation Analysis

Compensation vs Market: Jerome's total compensation ($USD2.22M) is above average for companies of similar size in the US market ($USD1.69M).

Compensation vs Earnings: Jerome's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: UTI's management team is considered experienced (2.4 years average tenure).

Board Members

Experienced Board: UTI's board of directors are considered experienced (5.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: UTI insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/09/30