Legacy Education Inc. (LGCY) AI Stock Analysis

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Legacy Education Inc.

(NYSE MKT:LGCY)

71Outperform

Legacy Education Inc. demonstrates strong revenue and enrollment growth, bolstered by sound financial management and strategic acquisitions. Despite strong technical momentum, the stock shows signs of being overbought. The company's fair valuation and robust earnings call further support a positive outlook, though caution is advised due to past revenue volatility and potential seasonal impacts.

Legacy Education Inc. (LGCY) vs. S&P 500 (SPY)

Market Cap

N/A

Dividend YieldN/A

Average Volume (3M)49.01K

Price to Earnings (P/E)15.9

Beta (1Y)1.21

Revenue Growth37.92%

EPS Growth37.61%

CountryUS

Employees195

SectorConsumer Defensive

Sector Strength71

IndustryEducation & Training Services

Share Statistics

EPS (TTM)0.21

Shares Outstanding12,380,557

10 Day Avg. Volume56,334

30 Day Avg. Volume49,006

Financial Highlights & Ratios

PEG Ratio1.41

Price to Book (P/B)2.49

Price to Sales (P/S)0.00

P/FCF Ratio44.31

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$10.80

Price Target Upside18.94% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Legacy Education Inc. Business Overview & Revenue Model

Company DescriptionLegacy Education Inc. provides education services to students, high school graduates, and working parents in the United States. The company offers a range of certificate or degree programs, including ultrasound technician (UT), vocational nursing (VN), VN Associate of Applied Science degree, Associate degree of nursing, nursing assistant, magnetic resonance imaging (MRI) Associate of Applied Science, cardiac sonography, pharmacy technician, dental assisting, clinical medical assisting, medical administrative assisting, medical billing and coding, and veterinary assistant. It also provides a range of certificate or degree programs, such as phlebotomy technician avocational, nursing assistant avocational, UT Associate of Applied Science degree, business administrative specialist, computer specialist, accounting, medical administrative assistant, medical assisting, veterinary technology Associate of Applied Science, avocational phlebotomy technician program, registered nurse to Bachelor of Science in nursing, and diagnostic medical sonography program. The company operates under the High Desert Medical College, Central Coast College, and Integrity College of Health academic institutions. Legacy Education Inc. was incorporated in 2020 and is based in Temecula, California.

How the Company Makes MoneyLegacy Education Inc. makes money primarily through the sale of its educational courses and programs. These are offered both online and in-person, allowing the company to reach a wide audience. Revenue is generated through tuition fees paid by individuals attending these courses and workshops. Additionally, the company may partner with educational institutions or industry experts to enhance its offerings, which can contribute to its revenue streams. Legacy Education Inc. might also earn income from the sale of supplementary educational materials or tools that support its core programs.

Legacy Education Inc. Financial Statement Overview

Summary

Legacy Education Inc. demonstrates strong revenue growth and profitability, with a solid balance sheet and manageable debt levels. However, there are concerns about revenue consistency and cash flow fluctuations.

Income Statement

Positive

Legacy Education Inc. shows strong revenue growth and improving profitability. The revenue grew by 29.7% from 2023 to 2024, signaling a positive growth trajectory. Gross profit and net profit margins are solid at 42.7% and 11.1% respectively for 2024, indicating stable profitability. However, the company experienced a significant revenue drop in 2021, which raises concerns about revenue stability.

Balance Sheet

Positive

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.22, which reflects a low level of leverage and financial risk. Stockholders' equity has grown consistently, and the equity ratio is a robust 63.8% in 2024, indicating financial stability. However, the total debt increased from 2022 to 2023, which warrants monitoring.

Cash Flow

Positive

Free cash flow is positive and growing, with a 2024 free cash flow of $1.23 million, representing a decline from the previous year's $1.57 million. The operating cash flow to net income ratio in 2024 is 0.32, suggesting moderate efficiency in cash generation relative to income. Although positive, cash flows show some fluctuation over the years.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Dec 2019
Breakdown
Income Statement		Total Revenue
52.72M	46.00M	35.46M	30.70M	57.81M	16.43M
	Gross Profit
22.95M	19.65M	14.67M	12.59M	30.06M	5.04M
	EBIT
7.53M	6.22M	3.62M	3.22M	9.23M	-2.38M
	EBITDA
8.98M	7.37M	4.19M	3.67M	10.12M	-702.79K
	Net Income Common Stockholders
18.16M	5.11M	2.67M	2.34M	9.61M	-687.64K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.87M	10.38M	9.29M	8.77M	7.85M	1.42M
	Total Assets
62.07M	35.17M	27.25M	20.61M	17.95M	10.76M
	Total Debt
15.93M	4.84M	5.56M	953.24K	1.10M	1.21M
	Net Debt
-936.07K	-5.54M	-3.74M	-7.81M	-6.74M	-206.00K
	Total Liabilities
25.66M	12.75M	11.82M	7.01M	6.95M	4.68M
	Stockholders Equity
36.41M	22.42M	15.42M	13.60M	11.00M	6.08M
Cash Flow		Free Cash Flow
2.06M	1.23M	1.57M	793.73K	4.64M	-683.43K
	Operating Cash Flow
2.57M	1.65M	1.77M	1.09M	4.84M	-596.95K
	Investing Cash Flow
-6.64M	-423.71K	-195.08K	-294.87K	-199.59K	-271.01K
	Financing Cash Flow
9.27M	-238.55K	-1.05M	129.03K	1.79M	2.06M

Legacy Education Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LGCY	71 Outperform		15.94	24.70%	―	37.92%	37.61%
Sector *	64 Neutral	$8.77B	14.68	4.78%	173.90%	3.25%	2.18%
AMBO	52 Neutral	$8.71M	―	-49.39%	―	―	―
CLEU	44 Neutral	$4.65M	―	-7.45%	―	―	―
WAFU	43 Neutral	$6.88M	―	-7.52%	―	-28.27%	-409.38%
VSA	35 Underperform	$8.26M	―		―	―	―

* Consumer Defensive Sector Average

Performance Comparison

LGCY

Legacy Education Inc.

9.08

4.69

106.83%

VSA

TCTM Kids IT Education

0.83

-0.67

-44.67%

AMBO

Ambow Education Holding

3.05

1.54

101.99%

WAFU

Wah Fu Education Group

1.56

-0.47

-23.15%

CLEU

China Liberal Education Holdings

1.38

-1,390.62

-99.90%

GSUN

Golden Sun Education Group Limited Class A

3.24

-2.34

-41.94%

Legacy Education Inc. Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q3-2025)

% Change Since: 16.71%|

Next Earnings Date:Oct 13, 2025

Earnings Call Sentiment Positive

The earnings call highlights significant achievements in revenue and enrollment growth, successful acquisition integration, and a strong financial position. Despite some increased expenses and anticipated seasonality impacts, the positive aspects outweigh the negatives.

Q3-2025 Updates

Positive Updates

Record-Breaking Revenue Growth

Legacy Education achieved a record-breaking quarter with revenue soaring 50.7% year-over-year to $18.6 million, marking 11 consecutive quarters of double-digit revenue growth.

Significant Increase in Enrollment

The company saw a 70.7% increase in new student starts and a 49.8% growth in ending enrollment, reaching 3,245 students as of March 31, 2025.

Successful Acquisition Integration

The integration of Contra Costa Medical Career College added 468 students and expanded Legacy Education's footprint in high-demand healthcare markets.

Strong Financial Performance

Legacy Education reported a net income increase of 57.1% to $2.8 million, and an adjusted EBITDA rise of 60% to $3.9 million year-over-year.

Robust Cash Position

The company maintains a strong balance sheet with $17.3 million in cash and $22 million in working capital, providing ample liquidity for growth initiatives.

High Placement Rates

Legacy Education reported an overall nursing NCLEX pass rate of 83% and placement rates of 75% and 76% through their accreditors ACCET and ABHES, respectively.

Expansion in High-Demand Programs

The company is adding new program offerings in high-demand fields such as sterile processing, surgical technician, and EMT, aligning with employer needs.

Negative Updates

Increased General and Administrative Expenses

General and administrative expenses increased to $4.6 million or 24.9% of revenue, up from $3.3 million or 26.8% of revenue last year, driven by higher marketing, professional fees, and bad debt expense.

Seasonality Impact

The company anticipates seasonality impacts in Q4, which may lead to lower revenue compared to Q3, despite strong starts and enrollment trends.

Company Guidance

During the Legacy Education Third Quarter Fiscal 2025 Earnings Conference Call, the company provided robust guidance highlighting significant growth metrics. Legacy Education achieved a remarkable 50.7% increase in revenue year-over-year, reaching $18.6 million, driven by a 70.7% surge in new student starts and a 49.8% rise in ending enrollment, totaling 3,245 students. The integration of Contra Costa Medical Career College contributed notably, adding 468 students. Legacy Education reported a net income of $2.8 million, or $0.21 per diluted share, with an adjusted EBITDA up by 60% to $3.9 million. The company maintained a strong balance sheet with $17.3 million in cash and $22 million in working capital, supporting its growth initiatives. The operational focus included expanding hybrid learning models, leveraging advanced simulation technology, and enhancing program offerings to meet market demands. The company remains optimistic about its strategic priorities, including enrollment growth, program expansion, and potential acquisitions, underpinned by strong liquidity and minimal debt.

Legacy Education Inc. Corporate Events

Executive/Board Changes

Legacy Education Inc. Amends Executive Employment Agreements

Neutral

Mar 28, 2025

On March 28, 2025, Legacy Education Inc. announced amendments to the employment agreements of its CEO, LeeAnn Rohmann, and CFO, Brandon Pope. Ms. Rohmann’s salary was increased to $415,000, with potential payouts tied to company performance. Mr. Pope’s agreement includes a $300,000 base salary and potential annual bonuses, with terms for severance and equity vesting upon certain types of termination.

Regulatory Filings and Compliance

Legacy Education Inc. Updates Investor Presentation

Neutral

Mar 14, 2025

On March 14, 2025, Legacy Education Inc. updated its investor presentation on its website, which will be utilized at the 37th Annual Roth Conference from March 16-18, 2025. This update is part of a regulatory filing and is not intended to be incorporated into other documents under the Securities Exchange Act of 1934.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.