Value
9.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.7 |
| P/S | 8.8 |
| EV/EBITDA | 8.6 |
| Fwd P/E | 9.4 |
| PEG | 9.1 |
- ▸Forward P/E: 9.5x
- ▸PEG: 0.65
- ▸Attractively valued
PRDO · Why this verdict
Why Perdoceo Education (PRDO) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score5.9/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Perdoceo Education is a high-quality for-profit education company with a perfect four-quarter earnings beat streak, 20% net margins, a Piotroski F-Score of 9/9, and a PEG of 0.69, representing a well-priced quality compounder whose only near-term obstacle is the weak momentum that has the stock below its 200-day moving average during what appears to be a pullback within a longer-term uptrend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company pays a dividend with a payout ratio of 186% of trailing earnings and maintains a strong current ratio of 8.2, with free cash flow quality of 7.7 out of 10 indicating that cash generation is robust enough to support both the dividend and share repurchases. Catalyst breakdown | The dividend is maintained or increased and free cash flow covers at least 100% of the dividend payment over the next 4 quarters. | ↓Deteriorating |
| CounterA 186% dividend payout ratio based on earnings suggests the dividend may be partially funded from prior cash reserves; if earnings decline due to enrollment pressures, the dividend could come under pressure. | ||
Perdoceo scores a perfect 9/9 Piotroski F-Score, generates 20% net margins ranked best-in-class among education peers, and trades at a forward price-to-earnings of 9.7 times with a PEG of 0.69, making it a rare combination of quality and value in the consumer defensive education sector. Quality breakdown | The forward price-to-earnings ratio expands toward 12-14 times over the next 12 months as investors recognize the quality-value combination, or the stock appreciates toward the analyst target of $37.40. | →Stable |
| CounterFor-profit education companies face persistent regulatory scrutiny regarding student outcomes, accreditation, and federal financial aid eligibility; a single regulatory adverse action could fundamentally impair the business model. | ||
The company has beaten consensus EPS in every one of the last four quarters with an average positive surprise of 6.51% and the most recent quarter delivered EPS of $0.90 versus the estimate of $0.84, reflecting consistent management execution above analyst expectations. Earnings | The company beats consensus EPS in at least 3 of the next 4 reported quarters, maintaining the beat streak. | ↓Deteriorating |
| CounterThe average beat of 6.51% is relatively modest, and as analysts reset models higher after each beat, the risk is that future beats require more operational stretch to achieve. | ||
The stock is currently below its 200-day moving average but the moving average itself is still rising at positive 1.9% per 30 days, suggesting this is a temporary pullback within a longer-term uptrend rather than a structural downtrend, with strong technical support identified at current levels. Momentum breakdown | The stock reclaims its 200-day moving average within 3 months and the momentum score rises above 5.0. | ↓Deteriorating |
| CounterWhat appears to be a pullback can extend into a genuine downtrend; the momentum score of 3.7 combined with falling on-balance volume indicates that selling pressure may persist longer than expected. | ||
The company pays a dividend with a payout ratio of 186% of trailing earnings and maintains a strong current ratio of 8.2, with free cash flow quality of 7.7 out of 10 indicating that cash generation is robust enough to support both the dividend and share repurchases.
↓DeterioratingCatalyst breakdown
- Expectation
- The dividend is maintained or increased and free cash flow covers at least 100% of the dividend payment over the next 4 quarters.
CounterA 186% dividend payout ratio based on earnings suggests the dividend may be partially funded from prior cash reserves; if earnings decline due to enrollment pressures, the dividend could come under pressure.
Perdoceo scores a perfect 9/9 Piotroski F-Score, generates 20% net margins ranked best-in-class among education peers, and trades at a forward price-to-earnings of 9.7 times with a PEG of 0.69, making it a rare combination of quality and value in the consumer defensive education sector.
→StableQuality breakdown
- Expectation
- The forward price-to-earnings ratio expands toward 12-14 times over the next 12 months as investors recognize the quality-value combination, or the stock appreciates toward the analyst target of $37.40.
CounterFor-profit education companies face persistent regulatory scrutiny regarding student outcomes, accreditation, and federal financial aid eligibility; a single regulatory adverse action could fundamentally impair the business model.
The company has beaten consensus EPS in every one of the last four quarters with an average positive surprise of 6.51% and the most recent quarter delivered EPS of $0.90 versus the estimate of $0.84, reflecting consistent management execution above analyst expectations.
↓DeterioratingEarnings
- Expectation
- The company beats consensus EPS in at least 3 of the next 4 reported quarters, maintaining the beat streak.
CounterThe average beat of 6.51% is relatively modest, and as analysts reset models higher after each beat, the risk is that future beats require more operational stretch to achieve.
The stock is currently below its 200-day moving average but the moving average itself is still rising at positive 1.9% per 30 days, suggesting this is a temporary pullback within a longer-term uptrend rather than a structural downtrend, with strong technical support identified at current levels.
↓DeterioratingMomentum breakdown
- Expectation
- The stock reclaims its 200-day moving average within 3 months and the momentum score rises above 5.0.
CounterWhat appears to be a pullback can extend into a genuine downtrend; the momentum score of 3.7 combined with falling on-balance volume indicates that selling pressure may persist longer than expected.
Per-dimension breakdown
Quality
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.9 |
| ROA | 6.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 8.3 |
| FCF quality | 7.2 |
| Moat | 7.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸Strong margins: 21%
- ▸Rule of 40: 23 (fail)
- ▸Strong Piotroski F-Score: 9/9
- ▸High-quality business
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.9 |
| EPS growth | 6.2 |
Momentum
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.4 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 4.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+1.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 9.2 |
- ▸Analyst upside: 40%
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $1,877,677 (0.095% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 7.3 |
| growth rank | 0.0 |
- ▸Best-in-class margins
Technical
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.2 |
| support resistance | 8.3 |
| 52w position | 6.5 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.8 |
| days to cover | 4.3 |
| volatility | 5.3 |
| put call | 0.0 |
| implied vol | 2.8 |
| beta | 8.7 |
| debt equity | 9.6 |
- ▸Elevated put/call: 5.20
- ▸High IV: 63%
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.3 |
| dividend safety | 7.5 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 7 days
- ▸Dividend aristocrat: 2.2% yield
How the verdict was assembled
Engine trigger
Value play: 37% MoS with quality 7.8.
Engine technical detail
verdict_path:
L4:PATH_A_VALUE_MOS33|ENTRY_STICKY:WITHIN_BANDPassed (5)
- ASYMMETRY:3.3>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.4<4.5
- EARNINGS_PROXIMITY:7d<=7d
Warning (0)
none
Reward-to-Risk
3.26
Upside
+18.8%
Downside
5.8%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (7.8) with weak momentum (2.4)
SuitabilityAggressive — MCap $2.0B<$5B
Investment implication
The STRONG_BUY_WAIT verdict reflects the MOMENTUM gate's 2.4<4.5 outcome against Value at 9.0 and asymmetric R:R of 3.26.
The strongest dimensions are Value at 9.0, Technical at 8.0, and Quality at 7.8; the weakest are Momentum at 2.4, Insider at 3.8, and Growth at 4.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 3.26 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Quality Low Peg Value
Trip ifNet margin falls below 15% in any reported annual period over the next 12 months.
- P2Perfect Four Quarter Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 reported quarters.
- P3Momentum Pullback Uptrend Context
Trip ifThe 200-day moving average slope turns negative and remains below 0% for more than 2 consecutive months.
- P4Dividend Cash Generation
Trip ifThe quarterly dividend is reduced by more than 15% at any point over the next 12 months.