Legacy Education: The Next Growth Phase Is Already Underway (Rating Upgrade)

Summary Legacy Education is upgraded to Strong Buy after a post-earnings selloff, with valuation now highly compelling. LGCY’s Q4 revenue growth slowed to 12%, and new student starts declined, but multiple organic growth initiatives are underway. Management expects margin expansion and sees Texas expansion as a key step to reduce geographic concentration and drive future growth. Even with conservative assumptions, LGCY offers significant upside and margin of safety, with forward P/E around 13x. Alvarog1970/iStock via Getty Images Investment Thesis Legacy Education's ( LGCY ) shares fell sharply after a Q4 earnings with slower revenue growth and a decline in new student starts. Still, I think the selloff is overdone because the company is investing in This article was written by Fernanda Galvez Jalil 1.26K Followers Follow My name is María Fernanda and I'm currently studying an MBA. My inspiration investors are Warren Buffett, Peter Lynch and Terry Smith, so I look for quality companies at a reasonable valuation. I believe that, in the long term, fundamentals are what drive the share price, so I look to predict what a business's earnings per share will do. Analyst’s Disclosure: I/we have a beneficial long position in the shares of LGCY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.