NYSE:UTI

Stock Analysis Report

Universal Technical Institute

Executive Summary

Universal Technical Institute, Inc. provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle, and marine technicians in the United States.

Rewards

Trading at 91.1% below its fair value

Earnings are forecast to grow 124.53% per year

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Universal Technical Institute's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UTI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.3%

UTI

1.1%

US Consumer Services

1.5%

US Market


1 Year Return

166.5%

UTI

35.0%

US Consumer Services

20.1%

US Market

Return vs Industry: UTI exceeded the US Consumer Services industry which returned 35% over the past year.

Return vs Market: UTI exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

UTIIndustryMarket
7 Day3.3%1.1%1.5%
30 Day24.3%2.8%1.4%
90 Day63.4%18.7%8.7%
1 Year166.5%166.5%35.4%35.0%22.7%20.1%
3 Year173.5%173.5%124.0%113.8%50.1%40.5%
5 Year-0.2%-3.6%197.1%163.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is Universal Technical Institute's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Universal Technical Institute undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UTI ($9.3) is trading below our estimate of fair value ($104.02)

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


Price To Earnings Ratio

PE vs Industry: UTI is unprofitable, so we can't compare its PE Ratio to the Consumer Services industry average.

PE vs Market: UTI is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate UTI's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: UTI is overvalued based on its PB Ratio (4.2x) compared to the US Consumer Services industry average (2.2x).


Next Steps

Future Growth

How is Universal Technical Institute forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

124.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UTI is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: UTI is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: UTI's is expected to become profitable in the next 3 years.

Revenue vs Market: UTI's revenue (3.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: UTI's revenue (3.3% 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


Next Steps

Past Performance

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

-12.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UTI is currently unprofitable.

Growing Profit Margin: UTI is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: UTI is unprofitable, and losses have increased over the past 5 years at a rate of -12.5% per year.

Accelerating Growth: Unable to compare UTI's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: UTI is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Services industry (14.8%).


Return on Equity

High ROE: UTI has a negative Return on Equity (3.59%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Universal Technical Institute's financial position?


Financial Position Analysis

Short Term Liabilities: UTI's short term assets ($116.6M) do not cover its short term liabilities ($117.0M).

Long Term Liabilities: UTI's short term assets ($116.6M) do not cover its long term liabilities ($138.8M).


Debt to Equity History and Analysis

Debt Level: UTI is debt free.

Reducing Debt: UTI has not had any debt for past 5 years.


Balance Sheet

Inventory Level: UTI has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if UTI's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable UTI has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: UTI is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -23.1% per year.


Next Steps

Dividend

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


Dividend Yield vs Market

company0%marketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of UTI's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

1.6yrs

Average management tenure


CEO

Jerome Grant (56yo)

0.3yrs

Tenure

US$442,518

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 ($USD442.52K) is below average for companies of similar size in the US market ($USD1.11M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jerome Grant
CEO & Director0.3yrsUS$442.52k0.15% $368.3k
Troy Anderson
Executive VP & CFO0.4yrsUS$382.87kno data
Sherrell Smith
Executive Vice President of Campus Operations & Services1.8yrsUS$537.09k0.67% $1.6m
Lori Smith
Senior VP & CIO0.08yrsno data0.80% $1.9m
Jody Kent
Vice President of Communications & Public Affairs0yrsno datano data
Eric Severson
Senior Vice President of Admissions1.6yrsno data0.014% $34.5k
Todd Hitchcock
Senior VP & Chief Strategy and Transformation Officer0.08yrsno datano data
Roger Speer
President of Sacramento Campus6.7yrsUS$544.93kno data
Michael Romano
Campus President of Avondale Arizona Facility9.3yrsno datano data
Tess Dubois-Carey
President of Sacramento Campus4.5yrsno datano data

1.6yrs

Average Tenure

56yo

Average Age

Experienced Management: UTI's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jerome Grant
CEO & Director0.3yrsUS$442.52k0.15% $368.3k
Linda Srere
Independent Director15yrsUS$155.68k0.34% $805.3k
Kenneth Trammell
Independent Director8.7yrsUS$157.68k0.31% $745.0k
Roger Penske
Independent Director18.1yrsUS$99.00k0.30% $722.9k
Robert DeVincenzi
Independent Non-Executive Chairman2.4yrsUS$450.05k0.18% $421.7k
Roderick Paige
Independent Director9.4yrsUS$99.00k0.32% $772.2k
William Lennox
Independent Director6.1yrsUS$116.00k0.29% $697.7k
Kimberly McWaters
Non-Executive Director15yrsUS$1.05m2.3% $5.5m
John White
Director23.1yrsUS$85.00k10.14% $24.3m
David Blaszkiewicz
Independent Director8.2yrsUS$108.00k0.29% $703.6k

9.0yrs

Average Tenure

61yo

Average Age

Experienced Board: UTI's board of directors are considered experienced (9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

Universal Technical Institute, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Universal Technical Institute, Inc.
  • Ticker: UTI
  • Exchange: NYSE
  • Founded: 1965
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: US$239.426m
  • Shares outstanding: 25.74m
  • Website: https://www.uti.edu

Number of Employees


Location

  • Universal Technical Institute, Inc.
  • 16220 North Scottsdale Road
  • Suite 500
  • Scottsdale
  • Arizona
  • 85254
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UTINYSE (New York Stock Exchange)YesCommon StockUSUSDDec 2003
UTIDB (Deutsche Boerse AG)YesCommon StockDEEURDec 2003

Biography

Universal Technical Institute, Inc. provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle, and marine technicians in the United States. It offers certificate, diploma, or degree programs; and specialized technical education programs under various brands, such as Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute, and NASCAR Technical Institute. The company also provides manufacturer specific advanced training programs, including student paid electives at its campuses; and manufacturer or dealer sponsored training at various campuses and dedicated training centers, as well as offers programs for welding and computer numeric control machining. It operates 13 campuses. The company was founded in 1965 and is headquartered in Scottsdale, Arizona. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 00:09
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.