Universal Technical Institute, Inc.
) reached a 52-week high of $15.16 on Friday, Dec 6, 2013.
Despite missing both the revenue and earnings estimates,
Universal Technical's share price has been rising ever since it
reported better than expected student starts in the fourth
quarter of fiscal 2013 and offered positive outlook for fiscal
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The closing price of this automotive training school on Dec 6 was
$15.09, yielding a year-to-date return of 57.5%.
Share Price Drivers
Universal Technical's total student starts improved 9.5% to 6,900
in the fourth quarter of 2013, driven by higher number of
applications and an additional start date in the quarter. The
increase in total student starts was at the higher end of
management guided range of mid- to high single-digit increase.
Moreover, military student starts grew 11.0% and high school
starts grew 2.1%.
Despite the macroeconomic challenges, the transportation industry
is gaining momentum resulting in a growing demand for trained
technicians. In fact, the company is positive about its future
and expects low single digit revenue growth for fiscal 2014 on
the back of increased number of scholarships and a slight
increase in tuition fee. This is a significant improvement from
the 8% and 8.5% decline in revenues the company witnessed in
fiscal 2013 and fiscal 2012, respectively. The company expects
high single digit increase in applications in fiscal 2014. The
new student start rate is expected to be flat in 2014, compared
to a decline of 4.5% in fiscal 2013 and 3.1% in fiscal 2012. The
company further believes that with its focus on efficiencies and
student outcomes, it will witness solid operating growth in
Universal Technical carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the education sector include
New Oriental Education & Technology Group
Xueda Education Group
TAL Education Group
). While New Oriental Education carries a Zacks Rank #1 (Strong
Buy), Xueda Education and TAL Education hold a Zacks Rank #2