Morgan Stanley analyst Toni Kaplan upgrades $KinderCare Learning Companies (KLC.US)$ to a buy rating, and maintains the target price at $30.
According to TipRanks data, the analyst has a success rate of 58.2% and a total average return of 3.5% over the past year.
Furthermore, according to the comprehensive report, the opinions of $KinderCare Learning Companies (KLC.US)$'s main analysts recently are as follows:
The recent decrease in KinderCare Learning's stock price is seen as an appealing entry point. The company's shares have fallen 28% within the month, mainly influenced by a competitor's earnings report that showed slowed revenue in both the recent quarter and upcoming outlook, the results of recent elections which introduce a degree of uncertainty due to the company's substantial exposure to government subsidies, and its own earnings announcement which lacked further guidance. Analysts consider the market's reaction overly severe, noting that there has been little fundamental change in KinderCare's underlying business.
Following their Q3 results, the company's adjusted EBITDA exceeded estimates, primarily due to a change in tuition registration fees and certain timing benefits. Additionally, management reaffirmed their guidance for 2024 and beyond during their recent call. As the largest childcare provider in the U.S., the company is expected to gain advantages from its scale, particularly in hiring teachers and enrolling children.
KinderCare Learning is positioned to offer a favorable risk/reward by 2026 provided it upholds reasonable execution. The maintenance of KinderCare's pricing model is seen as a crucial driver for organic EBIT growth based on long-duration and fairly recurring revenue.
Note:
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Success rate is the number of the analyst's successful ratings, divided by his/her total number of ratings over the past year. A successful rating is one based on if TipRanks' virtual portfolio earned a positive return from the stock. Total average return is the average rate of return that the TipRanks' virtual portfolio has earned over the past year. These portfolios are established based on the analyst's preliminary rating and are adjusted according to the changes in the rating.
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