PRDO

Perdoceo is a high-quality, low-multiple compounder hiding in an out-of-favor sector. FY2025 revenue grew 24.2% to $846M with net income up 8.4% to $160M and diluted EPS of $2.42, while operating cash flow jumped 39.4% to $225M — well above reported earnings, which is the hallmark of a genuinely cash-generative model. Margins are robust (23.2% operating, 18.9% net) and ROE is a healthy 16.4%. The balance sheet is fortress-grade: $972M of equity, $111M cash, a ~5x current ratio ($697M current assets vs. $138M current liabilities), and no meaningful funded debt in the data. At $32.19 the stock trades at just 13.3x EPS and 2.4x sales — a discount that prices in stress the numbers don't yet show.

The one number to interrogate is the 24% revenue jump. Against a flat-to-declining base (FY2021 $693M → FY2024 $681M), a sudden surge to $846M alongside D&A up 184% strongly suggests the growth is acquisition-driven — consistent with the filing's emphasis on USAHS (University of St. Augustine for Health Sciences) joining CTU and AIUS as a reporting segment. So underwrite this as inorganic, not a reacceleration of organic demand; the core online-education franchise has been roughly flat for years. That reframes the call from 'growth' to 'value with optionality': you're paying ~13x for a steady cash machine that is buying growth and aggressively returning capital.