How I Made $5000 in the Stock Market

Buy This Stock on the Dip. Shares Can Rise Nearly 40%.

Sep 24, 2025 01:00:00 -0400 by Dan Victor | #Small-Caps #Barron's Stock Pick

UTI recently launched a program that prepares students for entry-level electrician roles in fields such as industrial robotics. (Courtesy of United Technical Institute)

Universal Technical Institute is preparing students for jobs that are unlikely to be replaced by AI anytime soon.

UTI

Universal Technical Institute Inc.

1-Year Price Chart

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$29.00

as of market close September 23, 2025

Market Cap

$1.6 B

NTM P/E

33.8

Div Yield

0%

Beta

0.87

52 Week Range

$15.14

$36.32

Key Points

About This Summary

Advancements in artificial intelligence and automation may disrupt millions of white-collar, professional-type jobs over the next decade. Yet the need for workers in skilled trades and healthcare is greater than ever.

The Bureau of Labor Statistics projects growth in skilled trade jobs to outpace average employment gains in the U.S. through 2033. Hiring for these positions could be more than 20 times the projected annual increase in net new jobs created in the U.S. through 2032, according to a McKinsey report from 2024.

Universal Technical Institute is on the right side of this transformative period in the labor market. The Phoenix-based company, with its 32 campuses and more than 22,000 students nationwide, has established itself as a leading vocational training provider.

Strong enrollment growth and record profitability have powered the stock to a 70% gain over the past year. A recent pullback from its highs offers investors the opportunity to pick up shares at an attractive entry point.

The company’s automotive technician program, now in its 60th year, differentiates itself by providing direct job placements through partnerships with auto manufacturers. The mechanics school remains a key part of its identity, but UTI now also offers programs in high-demand fields like aircraft maintenance; wind turbine installation; welding; and heating, ventilation, air conditioning, and refrigeration, or HVACR.

In 2022, UTI entered the healthcare industry through its acquisition of Concorde Career Colleges. This segment, offering programs in nursing, diagnostics, and dental hygiene, now represents approximately a third of the company’s total revenue.

“UTI is filling a critical gap in the U.S. labor market by training workers for careers that remain resilient and hard to automate,” says Ruoshi Qi, portfolio manager at Hood River Capital Management, one of the company’s largest institutional investors. Demand for UTI’s programs has held up even as employment data offer mixed signals, because its programs are tightly linked to clear career pathways and employer demand, Qi says.

Put succinctly, its programs prepare students for jobs that are unlikely to be replaced by AI anytime soon.

The company isn’t entirely content to sit out on the technological revolution, however. Through its North Star strategy, a multiyear plan focused on growth and diversification, UTI is opening new campuses and expanding into new high-growth fields. In July, it launched its first Electrical, Electronics, and Industrial Technology, or EEIT, program, preparing students for entry-level electrician roles in buildings wiring, computer systems networking, wireless technology, and even industrial robotics.

In a statement sent to Barron’s, Universal Technical Institute CEO Jerome Grant said student interest has been strong, with healthy enrollment for the new classes.

“We anticipate continued growth as artificial intelligence, automation, and advanced electronics reshape industries and expand into nearly every sector of the economy,” Grant says. “These forces are creating sustained demand for highly skilled EEIT professionals who can design, maintain, and optimize the technologies that power modern life—both in the workplace and at home.”

UTI’s third-quarter revenue climbed 15% year over year to $204 million. Adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, saw a 37% increase to $25.3 million. For the full year, management is targeting 14% revenue growth, with adjusted Ebitda projected at $124 million to $128 million, representing a 22% annual increase at the midpoint.

The optimistic outlook has won over several Wall Street analysts. Jasper Bibb at Truist Securities recently reiterated a Buy rating and a $40 price target on UTI, representing 38% upside from Tuesday’s close of $29.

The company’s enrollment momentum, particularly within its Concorde group, is outperforming expectations, Bibb writes in his report. A key catalyst comes from efforts by the Trump administration to expand federal funding to support short-term technical training programs with new provisions for Pell Grants. “Because the company’s multiyear financial targets effectively contemplate zero contribution from these training programs, any future revenue from this initiative would be an additional source of potential upside,” Bibb’s report says.

Universal Technical Institute’s stock trades at approximately 12 times enterprise value to estimated 2025 Ebitda. While this multiple is above that of the average for-profit education company, there’s a strong case that UTI deserves a premium given its leadership within the trade school space and differentiated in-classroom learning model, compared with a larger group of online-oriented education providers.

This is particularly evident when comparing UTI to its closest competitor, Lincoln Educational Services , which trades at a 2025 EV/Ebitda multiple of 11.4. While Lincoln has a similar operating model focused on skilled trades, it is a smaller company with comparatively less exposure to the healthcare industry. Its student population of around 3,600 is less than half UTI’s 8,500 students at Concorde. Another competitor, Adtalem Global Education , specializes in healthcare training but lacks programs for skilled trades. UTI also stands out for its more robust growth runway, with three new campuses planned to open in the coming years.

The main risk is the potential setback to growth targets. Quarterly enrollment figures will be particularly closely watched by investors. Unfavorable changes to for-profit education regulations or signs that UTI programs are losing market share would also place downside pressure on the stock.

Ultimately, Universal Technical Institute is a high-quality small-cap with solid fundamentals, making it a smart addition to investor portfolios.

Write to Dan Victor at dan.victor@barrons.com