Perdoceo Education (PRDO) Stock Forecast & Price Target

Perdoceo Education Corp has demonstrated solid growth in student enrollment, with a 7.1% increase at American InterContinental University, contributing to a total enrollment of 10,600 students, reflecting the company's ability to capitalize on favorable academic conditions. The organization's segment operating income also showed positive momentum, rising by 7.9% to $46.3 million, driven by increased revenue and an improved operating margin of 39.2%. Additionally, the significant growth in free cash flow, up 26.8% to $178.8 million in the first nine months of the fiscal year, underscores the company's financial health and capacity for reinvestment.

Perdoceo Education Corp reported a 6.5% decrease in segment operating income to $12.1 million, reflecting a decline in margin from 24.1% to 22.1%, primarily attributed to a non-recurring expense benefit in the previous year. The American InterContinental University System, which comprises 26.8% of total revenue, experienced a 1.2% revenue decrease, alongside a 2.9% decline in total student enrollment, leading to an operating loss of $1.7 million due to high depreciation and amortization expenses. Despite management's guidance indicating a potential increase in operating income for Q3/25, the overall declines in revenue and operating performance raise concerns about the sustainability of growth and financial health for Perdoceo Education.