LINC

Lincoln is executing operationally: FY2025 revenue grew 17.8% to $518M, enrollment reached 17,046 students across 22 campuses, and net income doubled to $20.0M with operating income up to $30.3M. The balance sheet carries no long-term debt (only a $40M revolver), equity of $200M, and operating cash flow nearly doubled to $59.3M. As a business, this is a healthy, growing career-training operator riding a genuine skilled-trades demand tailwind. The problem is the stock, not the company.

Valuation is the disqualifier. At $49.31 the shares trade at 77x FY diluted EPS of $0.64 and 3.0x sales — extreme multiples for a business running a 3.9% net margin and a 10% ROE. The earnings base is also lumpy and unimpressive in context: FY2025 net income of $20.0M is still well below the $34.7M earned back in FY2021, and the path between (FY22 $12.6M, FY23 $26.0M, FY24 $9.89M) shows how volatile profitability is. The flattering '+102%' growth is a bounce off a depressed FY2024, not a durable new earnings level. Paying 77x for $0.64 of cyclical EPS leaves no margin of safety.