Positive Outlook for Universal Technical Institute: Strong Growth Projections and Strategic Initiatives Drive Buy Rating
Alexander Paris has issued a Buy rating for Universal Technical Institute (UTI), citing strong growth projections driven by its North Star Strategy. UTI is expected to achieve a revenue CAGR of about 10% and enhance its adjusted EBITDA margin to 20% by fiscal year 2029. The stock trades at a premium, reflecting investor confidence, and the lifting of growth restrictions on the Concorde division is anticipated to boost revenue and earnings. Paris maintains an OUTPERFORM rating with a 12-month price target of $36, indicating a positive outlook for UTI's stock.
Alexander Paris has given his Buy rating due to a combination of factors including the anticipated strong performance of Universal Technical Institute (UTI) in the upcoming quarters. The company’s strategic initiatives under its North Star Strategy are expected to drive significant growth, with a projected revenue compound annual growth rate of approximately 10% through the expansion of existing programs and the opening of new campuses. This growth strategy is likely to enhance UTI’s adjusted EBITDA margin to around 20% by fiscal year 2029.
Furthermore, despite the aggressive risk profile, the company’s stock is trading at a premium compared to its peers, reflecting investor confidence in its growth potential. The recent lifting of growth restrictions on the Concorde division is expected to accelerate program and campus expansions, potentially leading to greater revenue and earnings upside in the coming years. These factors contribute to Paris’s reiteration of an OUTPERFORM rating and a 12-month price target of $36, indicating a positive outlook for UTI’s stock performance.
