What Growth Investors Love About Adtalem (ATGE): Three Compelling Reasons to Consider This Educational Tech Stock

Investors focused on growth opportunities are naturally drawn to companies demonstrating above-average financial momentum. However, many growth investors know that finding the right stock—one with genuine upside potential rather than inflated hype—requires careful analysis. The challenge is real: growth stocks inherently carry above-average risk, and selecting one whose growth narrative is fading rather than accelerating can lead to disappointing returns.

This is where systematic analysis becomes invaluable. The Zacks Growth Style Score provides a structured framework to identify companies with authentic growth potential by looking beyond surface-level metrics. Adtalem Global Education (ATGE) exemplifies exactly the kind of stock that merits growth investors’ attention. The company combines a strong Growth Score with a favorable Zacks Rank, positioning it as an opportunity worth exploring for expansion-focused investors.

Research shows that equities combining strong growth characteristics with top-tier rankings consistently outperform broader market indices. When a stock features both a Growth Score of A or B and a Zacks Rank of #1 or #2, returns tend to be particularly compelling. Here’s why Adtalem stands out for growth-oriented portfolios.

The Earnings Engine: Why Double-Digit Growth Gets Growth Investors’ Attention

Nothing attracts market attention quite like accelerating profitability. For growth investors, double-digit earnings expansion signals strong business momentum and typically correlates with robust stock price appreciation.

Adtalem’s historical earnings-per-share (EPS) growth clocks in at 22.4%, but what matters most for forward-looking investors is the projection ahead. The company is expected to deliver 18% EPS growth in the current year—a substantial outperformance against the industry average of 11.5%. This gap between company and sector performance is precisely the kind of divergence that growth investors search for. It suggests Adtalem’s business model is executing more effectively than competitors, even within a sector expected to show solid overall growth.

This earnings trajectory reflects the company’s ability to convert revenue into bottom-line profit more efficiently than peers, a hallmark of well-managed growth enterprises.

Operating Efficiency Matters: How Adtalem’s Asset Utilization Stands Out

Many investors overlook asset utilization ratio (also called the sales-to-total-assets or S/TA ratio), but it’s a critical metric for identifying true operational excellence in growth companies. This ratio reveals how effectively a firm converts its asset base into sales revenue—essentially measuring productive capacity.

Adtalem’s S/TA ratio of 0.69 means the company generates $0.69 in sales for every dollar invested in assets. Compared to the industry average of 0.68, this signals Adtalem operates with a slight edge in asset efficiency. More meaningfully, Adtalem’s sales are projected to grow 7.6% this year, outpacing the sector’s 6.7% average.

For growth investors, this combination matters: not only is Adtalem squeezing good returns from its assets today, but it’s also expanding that revenue base faster than comparable peers. This efficiency-plus-growth formula suggests management is deploying capital wisely to fuel expansion.

Market Optimism on the Rise: Tracking the Momentum Through Earnings Revisions

Perhaps the most underutilized signal in stock analysis is the directional trend of earnings estimate revisions. Academic research has established a strong correlation between upward earnings forecast revisions and near-term stock appreciation. When analysts are raising their profit expectations, it typically precedes positive price action.

Adtalem’s current-year earnings estimates have been trending upward, with consensus projections surging 0.3% over the past month alone. While this may seem modest in isolation, the direction matters: it reflects growing confidence among the professional analyst community that the company will deliver solid results. This contrasts sharply with stocks experiencing downward estimate revisions, which often precede disappointment.

This positive momentum in analyst expectations adds another layer of support for the investment thesis and reinforces why growth-focused investors should love the conviction building around this name.

The Bottom Line: Why This Growth Stock Deserves Your Consideration

Adtalem Global Education has earned a Zacks Rank of #2 (Buy) and a Growth Score of A based on the multiple factors outlined above and additional analytical work. This dual validation—solid profitability growth, operational efficiency, and rising analyst expectations—creates a compelling profile for growth-oriented investors.

The combination of strong fundamentals and positive momentum suggests Adtalem is positioned for outperformance. For investors seeking exposure to growth opportunities with credible supporting metrics, this educational technology company warrants serious consideration.

The full list of current Zacks Rank #1 (Strong Buy) opportunities and additional research resources are available through Zacks Investment Research for investors seeking deeper analysis and additional high-conviction growth ideas to explore.

This article originally published on Zacks Investment Research. The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.