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Critical Analysis: Nerdy (NYSE:NRDY) and Universal Technical Institute (NYSE:UTI)


Nerdy (NYSE:NRDY – Get Rating) and Universal Technical Institute (NYSE:UTI – Get Rating) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Volatility & Risk

Nerdy has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Universal Technical Institute has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Nerdy and Universal Technical Institute, as provided by MarketBeat.

Sell ​​Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
nerdy 0 two 5 0 2.71
Universal Technical Institute 0 0 3 0 3.00

Nerdy currently has a consensus target price of $5.78, indicating a potential upside of 72.99%. Universal Technical Institute has a consensus target price of $12.00, indicating a potential upside of 54.24%. Given Nerdy’s higher possible upside, equities analysts clearly believe Nerdy is more favorable than Universal Technical Institute.

Profitability

This table compares Nerdy and Universal Technical Institute’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
nerdy -13.70% -55.71% -8.72%
Universal Technical Institute 9.58% 31.96% 7.90%

Insider & Institutional Ownership

56.0% of Nerdy shares are held by institutional investors. Comparatively, 70.7% of Universal Technical Institute shares are held by institutional investors. 31.1% of Nerdy shares are held by company insiders. Comparatively, 3.5% of Universal Technical Institute shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Nerdy and Universal Technical Institute’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
nerdy $140.66 million 3.78 -$27.33 million ($0.26) -12.85
Universal Technical Institute $335.08 million 0.77 $14.58 million $0.59 13.19

Universal Technical Institute has higher revenue and earnings than Nerdy. Nerdy is trading at a lower price-to-earnings ratio than Universal Technical Institute, indicating that it is currently the most affordable of the two stocks.

Summary

Universal Technical Institute beats Nerdy on 9 of the 14 factors compared between the two stocks.

About Nerdy (GetRating)

Nerdy, Inc. operates a platform for live online learning. The company’s purpose-built proprietary platform leverages technology, including AI, to connect learners of various ages to experts, delivering value on both sides of the network. Its learning destination provides learning experiences across various subjects and multiple formats, including one-on-one instruction, small group classes, large format group classes, and adaptive self-study. The company’s flagship business, Varsity Tutors, operates platforms for live online tutoring and classes. Its solutions are available directly to learners, as well as through schools and other institutions. The company was founded in 2007 and is headquartered in Saint Louis, Missouri.

About Universal Technical Institute (GetRating)

Universal Technical Institute, Inc. provides transportation and technical training programs in the United States. The company provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle, and marine technicians. It also offers certificate, diploma, or degree programs under various brands, such as Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute, and NASCAR Technical Institute. In addition, the company provides manufacturer specific advanced training programs, including student paid electives at its campuses; and manufacturer or dealer sponsored training at various campuses and dedicated training centers, as well as offers programs for welding and computer numeric control machining. As of September 30, 2021, it operated 12 campuses. Universal Technical Institute, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.



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