$Lincoln Educational Services (LINC.US)$With a 75-year opera...

With a 75-year operating history, mainly training technicians and paramedics, it was listed at US $20 in 2005, with a current price of 6.31, an annualized growth of-6.6%.

Over the past five years, the gross profit margin has increased from 50.6% to 58.6%. The return on net assets has been positive since 2019, reached 55% in 2020, and fell to 23.7% in 2021.

Revenue and operating profit have been growing over the past five years, operating profit reversed in 2019, and net profit fell by 28.5% in 2021. 2022Q1's revenue rose 5.8%, but operating profit fell 105.4% into the loss range, while net profit fell 93.94%, barely flat.

The income statement shows that interest expenses account for 7.3% of operating profit in 2021, and the burden is affordable. The income tax rebate reached 35 million in 2020, bringing after-tax profits to 48.6 million. Although there was a 22.48 million gain from the sale of fixed assets in 2021, net profit fell as income tax shifted from rebates to expenses. If one-time gains from asset sales are not taken into account, pre-tax profit in 2021 is 25.47 million, an increase of 88.5% over 13.51 million in 2020, and core profitability is still increasing.

But at the same time, it is found that there are 8.62 million preferred stock dividends in 2021, which should also be counted as interest expense, with a total interest of 10.63 million, accounting for 38.7% of operating profit. The burden immediately rises, with net profit before tax of 16.85 million after adjustment and 1.673 million after adjustment in 2020. From this point of view, growth is more.

2022Q1 costs and expenses are growing faster than revenue growth, operating profit directly into the loss range, relying on income tax return net profit barely get rid of losses, preferred stock dividends, common shareholders are still lossmaking.

The current price-earnings ratio of 6, if deducted non-net profit, the price-to-earnings ratio of about 10.2, from the five-year profit growth point of view the valuation is not high. But if costs and expenses continue to grow faster than revenue growth, as they did in the first quarter, the company will soon lose money.

Over the past five years, the asset-liability ratio has fallen from 70.5% to 51.1%, with few receivables and inventories, little goodwill, and borrowing is no longer visible on the balance sheet, mainly because a 11.982 million preferred stock dividend will cause a certain burden.

Over the past five years, the net operating volume has increased rapidly, and the overall net investment has also been a net inflow, indicating that the asset demand is very small, and a lot of debts have been repaid in the past two years, but the 2022Q1 operating cash flow is in a net outflow state, which needs to be observed whether it will continue.

The current price-to-earnings ratio is 6.1 and the adjusted price-earnings ratio is 10 cents. According to the Q1 conference call, there are a lot of one-time expenses in the first quarter, which will improve after the third quarter, coupled with a very stable balance sheet, you can choose carefully now (⭐️).